I think what he is saying is overstated. I am sure the games do look better because of reduced pop in and that may give the appearance of the graphics looking better overall. I don't think compression has anything to do with it really. Installing to the hard drive doesn't change the fact that the data still has to fit into the 522MB of RAM on the system.
I'm sure Mass Effect will look much better simply because in the install would reduce the texture pop in and stop the frame rate hitches that occur when the game has to access the disc. I am sure something similar would be the case with Oblivion, GTAIV, or any other game that streams data due to the large free roaming environments being rendered.








