wow didn't know you could do thishow is it achieved?
Assuming it has an HDD, put the game into the drive, then go back to the Dashboard and press Y on the 'Play Game' screen. Should give you a list of options, one of which is to install the game. Takes a few minutes.
You need the disc in the drive even when the game is installed, but it won't actually read the disc except to check it's there when starting the game (for obvious reasons), so it's both far quicker to load and far quieter.