what is the hard drive used for?
do you use it to "install" games on like you do with a pc, or is it just used to store game data and other shit?
image, audio and video files for your favorite pics/photos, music and movies
Game updates: some titles recieve updates that add some extra content or balance things up. Motorstorm and Resistance for example both got automatic updates to improve the online experience. Eye of Judgement gets updates for the newer cards and improvement of the gameplay system.
Game saves: well thats pretty self-explained
Downloadable content: Playstation Network is filled with lots of content to download. There are PS1 games added as well as many PS3 games. Warhawk exists in downloadable and Blu Ray form. Wipeout HD will also be available. There are other games too such as Super Puzzle Fighter2 and other games. You can get demos from many games. Additionally you can find trailers from games and movies and wallpapers. There are extra content for your games to buy as well. Like extra songs for GH, extra cars, modes and tracks for Motorstorm etc
And there is "Home" too.
Unreal Tournament 3 on the PS3 is supposed to be compatible with user created content such as mods. HDD is needed for that kind of thing