XBOX 360 PS3 hard-drives?

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There are XBOX and PS3 consoles with 250GB.
I thought they used to run games directly from the disc. Can anybody tell me what is this space for? Is it just like PC that you can store games on it?
 
Game installs, DLC content, PSN/XBLA games storage, Game saves, media content (movies & music) etc.
 
You don't really need an HDD for the 360, all games will run without installing, but nowdays (most) ps3 games require a game install. It can range from a few MB's to a few GB's.
 
I would recommend you to read some info on Wikipedia on Xbox 360 and PS3 it has some nice info
 
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