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Lafiel said:

ofcourse GT5:P has to install to the harddisk, because it's just the disc version of a downloadable game and therefore is coded to run from the HDD


 That's probably not the reason at all.  I wasn't involved with the PS2 scene so I don't know how the HD loader for PS2 worked but as far as the original Xbox you could rip discs to the HD all day (if modded and you had a big HD) and they'd play just fine regardless of the location change.  

Plus that doesn't explain why DMC had a lengthy install.