Upgrading the hard drive in your PS3 is a good idea, especially if you like to play and download a lot of games and demos, not to mention use your PS3 for videos and music. This is a relatively painless process, though it is an upgrade that many will not feel very comfortable doing. In the grand scheme of PC upgrades, this one is pretty simple.
For me, it took longer to get the blue screw and the four HDD sled screws out than it took to install the new drive, power on the PS3, and format the new drive. And that is not a joke. I have seen some PS3 systems where it is quite easy to unfasten the holding screws, but that was not the case for me. I also was quite successful in stripping a few of the sled screws because they are pretty small, smaller than your average 2.5" drive setup.
But first things first — let’s not get ahead of ourselves. I would consider shopping around at TigerDirect or Newegg, but I was able to find a 320 GB WesternDigital SATA 2.5" drive for $119. I am replacing the 60 GB drive in my launch PS3.
In the XMB go to Settings > System Settings > Backup and backup your current drive to an external USB drive. I suggest making your backup as lean as possible. Delete any game cache files (seeing as they usually weigh in at about 5 GB apiece) and any demos or other items you can always re-download later. Once you run through the backup process you are ready to go to work. My biggest piece of advice is to replace your hard drive before it reaches the limit, which was not the case for me.
Unplug everything and place the PS3 on a clean surface, preferably a work bench. The side door labeled "HDD" pops right off. There is a blue screw holding the sled in place; take that off. Lift the clasp and pull out the sled. Here you will find more screws holding the drive in place. Good luck with those buggers. Swap the drives, and put it all back together just as you took it apart; there really isn't much to it.