A German counterpart of me, from a long time scene site called ModControl (linked above), managed to install a hdd into a Wii internally.
The DVD drive is still inside the Wii and also working. He used a 120GB 1.8" hdd and said that bigger hdd's will be possible as well 1" hdd's but they are very expensive.
He removed 40-50% of the plastic head sinks but he also means that it should be no prob and he is on the job to testing this.
HDD will be connected via Zif to the USB ports of the Wii with only 5 wires for what I can see. With a USB A to A connector and console powered off it should be possible to transfare games from PC to Wii internal hdd.
The next days he will provide more infos and let use know how to do it. More PlayStation 3 News...