When you install your game from the disc to the hard drive, your console will:
1. Run quieter, a problem for older consoles.
2. Games will load faster and eliminate 'texture pop in' which some games display when running from disc.
3. Your DVD drive will last a lot, lot longer. When you install a game it will run from the hard drive saving wear and tear on the DVD laser and motor.
As the above poster has already said, you still need the disc as it stops piracy. If you were able to play without the disc people would just hire games or borrow them off their friends, got good for the industry.
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