This is good in my books.
Every game should be played installed. Less load times. Less texture pop in.
I have yet to see any texture pop in while playing Gears 3 and I saw this brought up in 2 different reviews. Those dudes must not have installed it.
People with 360's Arcades should research how to make their own hard drives. For 50 bucks you can make your own 240 GB HD using a 5 dollar custom case off ebay and specific WD hard drive.
While sky is the limit for PS3 owners in terms of HD room... Do they make 2GB laptop hard drives yet? :)