why not.....
put 2 120 gig drives in there and not bother with the dvd drive!!!!!
I have a lot of DIVX stuff, and its great having it on the hard drive, instantly accessible, heck, if they had terabyte drives i'd need a bigger one :-)
I've got a 120 gig and a dvd writer that does me fine, I've found that some divx things dont like being played of disc tho while they work perfectly fine on the hard drive
as for copied games, I own 14 original games and never will copy any, I has a PSone once and over 200 CDR games, I never bothered playing any of them fully as I got bored quickly
if you actually pay for a game, you do two things, Pay the people that actually made it, and you try to get your money's worth by playing it fully
If however you do own the originals, then backing them up on the hard drive makes things much easier, just selet the one from the menu and away you go!, much quicker loading on some too