This only work if you have a harddrive, benefit is that the harddrive is very much faster than the dvd. Yes you could also order the player to switch disk the entering some dungeons if they don't have a harddrive, far from ideal but workable.
While true, that if you dont have a HD your kinda screwed for this method... but then i'd have to sit back and ask "why'? Its to my understanding that you need a HD to save game (mind you i'm not a serious console gamer), but even if thats not true, the vast majority of people who ARE serious console gamers will have a HD. Saying that, i dont know any one who doesnt...
I sincerely hope Skyrim isnt "cut back" or "trimmed down" like oblivion was because of console restrictions. It was a goal for oblivion to fit on 1 disk, but i hope they dont make that a priority for Skyrim. If they can conjure up the content to span multiple disks, i think they should.