Gran Turismo 5's base installation is just 256 megabytes. There's also a 10 gigabyte install for roomier drives, according to the series' top designer.
Kazunori Yamauchi, who is also Polyphony Digital's CEO, said via Twitter (translated by Andriasang) that the 10GB install is what you'll want for a "smooth" experience.
What that means exactly is anyone's guess (nor how "less smooth" a 256MB installation would be.) But if you have less than 10GB of space on your PS3, you probably need a bigger drive, or need to clear some crap off your old one. It's nice of Polyphonyto accommodate the pack rats though.
Gran Turismo 5 Has Optional Hard Drive Install [Andriasang]