Right, also... the ability to "install" games to the hard drive has been part of the 360 for a while now. I believe it came along with the new UI, but I could be mistaken. I only just got mine for a second time (I got rid of my old one a while back - no games I was interested in).
From what I can tell, the main benefits from playing the game from the HD instead of the game disk are... the system runs quieter, it also runs cooler (the DVD drive generates a lot of heat) and load times are faster (not super-faster, but still faster).
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