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I have a 320 GB hard drive, so I wouldn't call it a problem. Although the DMC4 install was annoying- took 22 minutes and it wasn't really that much better than the 360 version. Every other install seems to be under 10 minutes, so as long as they somehow improve game performance and stay under 10 minutes, it's fine by me.
I may be mistaken but didn't the first Xbox have game installs?