Hello! So I decided to go ahead and do it - I'm going to grab a PS3 tomorow but I had a really quick question about hard drive space and the installation of games. 
 
1. Do all games for the PS3 need to be installed?
 
2. In terms of installation sizes, are we talking closer to what you might see on the PC - like a game with a 10 gig installation requirement or something like that? The first game that I will most likely pickup with be MSG4  so if anyone knows how big that one was to install, that would be a good start point.
 
Let me know.
 

MGS4 installs are around 4gb if I remember correctly,
also it de-installs the chapter you just played through then installs the
new during the (somewhat long but cool) Loading/Smoking screens.  
 
All games on the ps3 seem to install some data, be it 200kb-4gb,
some just do it in the background while playing so you don't notice.
Some however, like GTA4 have a long pre-install screen where you can do nothing
but watch some of the game's artwork.
 
If you ever run out of HD space, upgrading is done in 30 minutes easily.
 
.. and for my game pick, Infamous!

I think that you would have trouble filling up a 250 gb even if you bought every single game in the ps3's lifetime. (And didn't add anything else in it)

In addition to what others have said, if you ever run low on space you can easily delete the Game Data for games you don't plan on playing any time soon. The only problem with that is I think it bundles all the game data together, so if you downloaded any DLC for the game you might need to re-download it if you ever decide to play that game again.

Any reason you aren't waiting for the Slim?
 
Personally have 80gigs and have plenty of space still. However I don't keep demos, music or movies on my PS3 (they are streamed) and demos are deleted after I either buy the game or play through a few times or can't even enjoy it in the slightest.

I agree that you may be better off waiting for the slim since it has a rather large HDD. However, now that the price has dropped, you could probably find a used PS3 for considerably less than $300. Anyway, to answer your question, MGS4 has the biggest install of any PS3 title to date and that's at about 5.2 gigs. There are only like 25 PS3 games need any kind of install and only a few are big. I have owned pretty much all the major PS3 games except Killzone 2 (which doesn't even have an install) and the biggest were Resident Evil 5 (4GB), Street Fighter IV (~2GB), Devil May Cry 4 (4GB), and Heavenly Sword (1.1GB). 

Smaller cabinet, less power required, won't attract dust and better positioning of the vents is why the slim is a better deal. It will be 1 week before the slim in stores and if 80gig and 160gigs were going for say 250 and 300 i'd say its another story but its the same damn price lol.
 
1TB hard drives might be sub $100 however you are not using a SATA 3.5" drive in a PS3; you use 2.5" Laptop drives so you will be going to a 500GB maximum at the current state which is well 100 bucks. Why waste 100 bucks if you are never gonna use that much space.
 
I understand being impatient; hell I just bought a 40" 1080p Toshiba cause it came back in stock. Selling my 32" 720p Sharp to my parents as I wanted 1080p goodness.

1. no not all games require to be installed. some of the games need to be installed. 
 
2. i would say dont' worry about how big the file is. i would say they would be around 5gigs. don't worry about the installs to much because u can get a external hard drive to plug into the ps3 or u can buy a hard drive to put into the ps3. it is cheap to buy hard drives that are high now.