When the last Xbox 360 NXE update reduced the footprint of some full game installations, many assumed that Microsoft had simply employed an advanced mom-packs-your-suitcase algorithm. And while that wasn't the most technically accurate assumption, it didn't stray too far from the layman's truth.
"Xbox 360 game disc layouts are optimized for the reading speeds of optical discs drives and attempt to concentrate the game disc data at the fastest read locations on the disc," Thomas Soemo writes on the Xbox Engineering Blog. "This typically ends up creating gaps at the beginning, end, and in the middle of the disc layout where layer 1 transfers to layer 2." Soemo, a senior program manager lead at Microsoft, explains that in creating the update, "we went back and examined how much potential space savings we could deliver to customers by removing these gaps that can occur in the middle of the game code in the disc layout."
Removing the gaps benefited not only game installations, but the size of games obtained via Microsoft's Games on Demand service, which uses "the same underlying technology."
Also, your mom uses the same underlying technology.