With the new Fall Update for the Xbox 360, that is most likely slated for November, you gain the possibility to play any Xbox 360 game from your local hard drive. "Not only will the drive not spin, but load times are quicker, as well," promised Microsoft's Major Nelson. But will that really reduce load times noticably? Xbox Product Manager Germany Boris Schneider-Johne states in a utmost interesting interview with Golem.de that this won't be the case for the majority of 360 games.
We now allow the customer to install games on their hard drive. This is optional, you don't have to do it. But if I do it, these games will load faster because a DVD-drive with seek operation does have load times every now and then. There are prominent examples, for instance: Project Gotham Racing 3, one of the first games for the Xbox 360. There the load times have been very long; those are going to get reduced immensely. Recent games are already optimized; there the gain is relatively small.
--Boris Schneider-Johne in an interview with Golem