Note that even if you own the original digital content the terms & conditions of the relevant licensing agreement (to which you implicitly agree by buying/opening the item) may preclude copying or making backups. Also, as far as I know, it's illegal in many juristictions to use .
It was only because the hard drive contained 15 games that was illegal. There's nothing illegal about putting a large hard drive or chip on PS2s and Xboxes.
If you get a PS2 or Xbox the games will get badly scratched after a while which will lead to the games taking ages to load and crashing randomly during the game. To prevent this, I would chip the console and copy the game to the harddrive so it means your original game is in pristine condition and because you're playing from the hard drive its a lot faster loading.
Likewise when I buy a PC game I always download a non-CD executable which lets me play the game from the hard drive instead of spend ages looking for the CD just so I can put it the CD-ROM drive for the split second it takes to verify the securom protection.
There is no "fair usage" policy in Ireland i think it is called. Therefore, 99% of the stuff you buy in the shop, you cannot make any copies fo it at all, even for personal usage or backup...