Last night I started up the PS3 to put a few videos on it, and I noticed that I only had 17Gb of the 60Gb (55Gb) left.  I only have around 2Gb of videos and 3/4 demos amounting to around 5Gb maximum...so where is all the space gone to?

I have loads of game saves for Heavenly Sword, MGS4, GTA4 and Uncharted, but surely this doesn't amount to all the space, or does it?

Also, when you install a game at the start and it could be around 2 or 3Gb, where do these files go and how can you delete them?

Also are there any tools with the XMB or anywhere else that defrags your hard disk and maintains it etc?  Surely we will be needing these tools soon?

one of the problems is that after formatiing a 60GB hard drive on a PS3, you'll end up only being able to use about 55GB, thats just the way the cookie crumbles i'm afraid (as you've already said).
As for your games, you can delete the install files from your HDD by going into the Game Data folder and selecting delete for the individual games you'd like to remove.
You won't lose any saved games but you'll probably have to download all the patches again.
Or, you can do what I (and others) have done: back up your PS3, swap out the HDD for a larger one, and then let the PS3 format the drive then restore your stuff from the backup
As for defragging, not really necessary.

You can also try clear your browser cache if you use it often too...

You said you have a number of demos. Get rid of them. Play the demo if you like the game buy it. If you don't delete the demo off the HDD. Demos take up lots of space at about 1 GB a piece.

Installs are under game data utility.

I believe it can show you the size of your game data if you go to the specific file and hit triangle. I could log on and check right now, but I'm too lazy.

I have the 40 gig Model. So basically, there is no space left for other stuff besides games.
Is it safe to get a bigger hdd? And which one is to recommend? I was thinking to get a 160 gig hdd (since I need the money for October ;))
Sure a 250 gig hdd is better, but is it safe? I heard that its important to get a SATA 5400rpm, bcoz its the same speed like the ps3 hdd.
Anyone wiht experience with replacing hdd? suggestions?
Thanks in advance

 You should ask Dogs Rule he replaced is HDD with a 500 GB one.

Not exactly. ;) I went with performance rather than sheer size. Here is my thread describing my findings in case the OP wants to go down the upgrade road which in the long term in necessary.

(PS3) Testing performance benefits of a 7200RPM, 16MB HDD vs the ...

he stock HDD.

Oh woops I thought you had changed it ;.Sorry;

I did. To a reasonable 160GB, not the 500GB you claimed. But there were no (affordable) 16MB cache, 7200RPM 500GB 2.5in SATA drives at the time. Also, I can barely fill 1/2 of my 160GB now, so I don't know what I would do with 500GB.