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In response to "If you're booted up and insert the Install disc, you don't get the option. Installation starts, then "Insert Disc 2" then "Complete."" by Max

(the effect of doing it 'wrong' won't ruin gameplay, it's just noticeable and annoying if you're picky about draw distance and pop ins)

It sounds like to improve performance, Rockstar told the game to search for content on two different storage devices simultaneously, but by installing both to the same hard drive, the slow down degrades drawing a little.

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