Grand Theft Auto 5 has mandatory installation requirements on both PS3 and Xbox 360, Rockstar says in a Q&A post.

The Xbox 360 version comes with two discs: The first disc is a one-time, mandatory install and the second disc is used to play the game. After the initial installation there will be no need to swap out the discs. PS3 has one disc that starts an automatic installation process, and the game will be ready to roll after that's complete. The PS3 and Xbox 360 installs require 8GB of free space, and if using a flash drive with the Xbox 360 it needs to be a minimum of 16GB, with 8GB free. The flash drive must be, at minimum, USB 2.0 with 15 mb/s read speed, formatted for Xbox 360.
Speaking of swapping things, Rockstar provides more detail in the Q&A about the ability to switch between three playable characters at will in Grand Theft Auto 5, at least when not on a mission.

"And because they have their own schedules, you'll never know what they might be doing - you might drop in on Michael in the middle of a family dispute, interrupt Franklin chatting up some ladies, or Trevor on the run from the law - or whatever else these guys do in their free time," Rockstar says. "How and when you switch between characters when you're not on a mission is completely up to you."

Players won't have complete free will while switching between characters - it's not possible to kill other playable protagonists, Rockstar notes. Grand Theft Auto 5 is due out on September 17 for Xbox 360 and PS3.