Hard Drive Installs Take 2: The future and the present motivations for MS.

[alpha_dk]

One solution:
Have 2 drives:
1 SSD drive with enough space to cache one entire disk
->this will go down in cost over the life cycle of the product, and offer blazing fast access times.
1 normal style HDD
-> This is used for what the HDD is currently used for, which the exception of the X360 disc cache

Upon game insertion, it works as it does without install; things are loaded from the disk, and the game starts as they normally do to hide loading times; developer icons, title screens, etc.

The whole time, however, it is also precacheing the disk to the SSD. The disk is optimizeable so that the most needed textures are all near each other on the disk for faster read times (through no need to seek).

In this manner, the cache will fill itself as you are playing it; the first time you play you may have to deal with the loading that we put up with now, but as the disk populates it will get faster and faster.

This is likely where even the 360 is going to get to eventually; it's the next logical step in HDD caching, and since the data has to get loaded anyways to play the game, it takes very little extra work to send it over to the SDD as well (in fact, this could be done in hardware in future generations at very little cost).

Edit: I should be clear; as I said, I expect the 360 to get to this point eventually.  It does not need a separate SSD; I just posit one for performance gains (since if they follow this generation's HW, they will have both a flash drive for the OS and a separate HDD anyways)