Swapping out a PlayStation 3 hard drive can be done.  However, by doing so, you do void the warranty that came with the device.  As long as you hold onto the original hard drive and replace it before sending the unit in for repair, you can still utilize the manufacturer warranty.  Keep that in mind before attempting a swap out of the hard drive.  Also, make sure you are confident enough with your technical skills before attempting the following.

First and foremost, if you want to transfer your data you can do this in one of two ways. You can either transfer all the data to a USB-based portable hard drive or you can transfer the data between the hard drives once the PlayStation 3 hard drive is removed. In most cases, the former will be the best way to go about the data transfer. Once you have transferred or backed up your data, then proceed to the actual hard drive swap out itself.

Make sure your PlayStation 3 is powered off, disconnected and unplugged from its power source. Look for the flap labeled HDD, you will need a precision screwdriver to unscrew a simple blue screw to get to the hard drive itself. Once you have unscrewed it, you will be able to slide it out. From there, you want to unscrew each screw on the enclosure and set them aside. Now, the hard drive itself can be pulled out and set aside.

Then, take the new hard drive and fit into the enclosure, screw the screws you just took out back in tightly and then slide the hard drive back into the PlayStation 3 HDD slot.  Screw the blue screw back into its place, close the flap, plug your PS3 back in and turn it on.  You will need to format the HD before you proceed; the console will prompt you to do this so you do not have to search for a place to do it.  Once the PlayStation 3 is formatted, you can either restore your backup files or start from scratch on the unit and begin gaming with an upgraded hard drive.