I completely see your point, but that's the real crux of the matter as others have mentioned - Sony are just pissed off because they now aren't selling their well overpriced 5400RPM 40GB Maxtor drives (of which I can get a standard PC version which costs around £8), and which are a load of s*** compared to what we can now use...

, and they are also pissed because they never actually made the software themselves.
[RANT/Begins]
Typical Sony really, lets charge top whack for a sub standard piece of crap! The console may be very good (when it works), but the lasers are a bag of crap, and lets not forget how much you pay for one of these things. SCEE ain't moaning about the HDLoader, just SCEA which seem to be up their own arse most of the time anyway.
As EvoEvo said, Microsoft don't moan about XBOX games being played from the HDD, so why do Sony?
At the end of the day, people can copy discs to HDD and boot it. But people can also copy games and boot them with a mod. The mod allows the discs to boot, and the HDLoader allows the HDD to boot. So, how come mods aren't being attacked? Easy, because HDLoader is an easy problem to quash, as it's sold by a handful of outlets and made by one person. Sony have lost on more than 1 occasion at stopping mod sales, so they gave in. But, the two aren't really any different, so hopefully they'll lose again

HAHA Sony.
They are just pigs who are out to crush anything which opposes them, and they have to be careful, as on more than one occasion, Sony have very nearly made me think twice about buying another Sony product because of their actions.
Another funny thing, is the Aibo. When those crappy imitations of it came out at christmas that year, which cost £30, and sold really well, and Aibo which costs £1,500 (Typical Sony, again) and does the same things (because I tried one), sold like a lead baloon, why didn't Sony get a bug up thier arse then - one version even looked exactly the same... Because they were popular and being made and sold everywhere. Sony are just bullies picking on small people and a relatively small number of places selling them. All I can say to the people who are contesting this crap, is good luck, and hopefully you'll kick Sony on its arse...
[RANT/Over]
Even if Sony win, HDLoader will just become more Homebrew - you'll still be able to get hold of it, and Sony won't be able to do jack about it. I think I have some good points, but I agree, in the wrong hands it can be a piracy explosion, but for the majority of users like me who want to use it purely to boost loading times and get rid of lag caused by the substandard DVD-ROM, it's a must. Sony realised this and realised just how good an idea, and how popular it was. Cue lawsuit and if HDLoader is quashed, you'll see in a few months, Sony will release their own version, which (of course) will HAVE to utilise their OWN HDD!
I understand that Sony want to protect their investment, but I feel it has made its investment back by about ten times, it's purely a cash cow for them. I'm just pissed that they can't be a little more leanient about what they do, and give people the option to buy a real HDD or their crappy one, and then have the option to either install everything, or just one or two titles...