No thanks. First, there's too much good stuff on XBLA and stuff to download right now...I'd rather have the empty space for future options.
Second, most people will only have a 20GB HD, PS3 installs range from 4-6 gb's per game. Third, If I wanted to install a game, I'd buy a PC. Consoles are pop in a game and play, not pop it in, let it install for 30 minutes and then play.
Plus for PS3 using a standard Hard Drive, I'm more willing to use space because I can get any hard drive I want. I'm not paying 200$ for Microsoft's ridicolous hard drive when I could have a 500GB for half of that price. MS messed up this gen with small Hard Drives (And for some, no Hard Drive at all), so keep those installs far far away from me.
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