Regarding the issue about the laser doing damage to the CD over time...would it be possible to have it so you do need to use the CD to launch the game (as in the copy protection of BD) but once the game is loaded and the CD checked you could remove it?

I think the CD's need to stay in the drives for most games but why should they if you can copy all the files in a full install to the hard drive. At least then the CD wont be accessed enough to damage it.