that's what Sony recommends and they probably have good reason for it. i don't believe there's any performance boost with 7200 RPM drives anyway.

1 TB will be more than enough. average game size is like 15GB (early games be like 7 or 8 gigs, late first party games top out around 25 gigs). You can easily put 60 full retail games on a terabyte. that's being conservative. like i said, i got a smaller drive with close to 80 games: half AAA, half downloadable.

>The instructions I've read suggest that I'm copying certain
>files to a thumb drive, disconnecting the old 120 HDD,
>connecting the new (500 GB - 1 TB) HDD, and downloading stuff
>from the network again. Is that about it?

if you have an external hard drive larger than 120 (or whatever the size is of the stuff you have on your ps3 now), you can transfer everything over to your new HDD without having to re-download.