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Well the main reason why PS3 has installs instead of multiple discs is because disc size is not the issue they are facing. In fact most PS3 games could be made to fit on a DVD if needed (MGS4 would need a lot of work). The actual reason is because the disc read speed of a Blu-ray disc is too slow for gaming. So if I owned a PS3 I would prefer the installs because the in-game performance issues would be really bad.

So the OP is not really stating the trade-offs that are at issue with a PS3 install vs 360 no-install.