Apparently some people have found out about a feature that was not announced with the new dashboard update.
The new feature happens to be smaller installs of games on the HD. While some of the games are only a few hundred megabytes less, others like KOF XII are drastically smaller going from a 3.7 gb down to a mere 705 mb.
This sounds fairly awesome, but wait there is more.
A rumor about being able to install games with multiple discs and then only needing the first disc to play the game is also in the cards. Supposedly this feature needs to be approved by the publisher/developer before working with thier game.
Lets hope this is all true and enjoy your new space on that HD!
Source:
http://forum.teamxbox.com/showthread.php?t=626993