Sorry for the necro, but I figured I'd rather post in here compared to making a new thread.
It took mine about 1 hour 35 minutes to transfer all my old data from my 250GB MGS4LE PS3 to my new 120GB PS3 Slim. It was so annoying, and I unfortunately was still stuck with at least 50GB "used" by some unknown item. I only have a few purchased PSone games and demos, so I figured I'd start fresh after just transferring my saves to an external HD. The only protected saves were for Assassin's Creed 2 and Motorstorm: Pacific Rift, neither of which will take too long to restart the game and play to catch up.
After the data transfer, I just swapped the 120GB out of the slim for the 250GB WD drive I had in the MGS4 fat PS3 (I have no idea why they only shipped those with 40GB drives, I'd never survive!). I'm just redownloading all my purchases while I'm at work and the PSthree is running at home. As a side note, i'm freaking out because I just started reading threads from people whose Slims have been overheating, and I don't want anything bad to happen while i'm 6.5 hours away from being home
I guess the point or issue of my thread would be this: Why on earth does Sony require us to format the drive when we install a new one in the PS3? I would understand if it was a brand new drive, but why do they just not work when you just want to swap a hard drive out for a larger one with all your original saves?
I'm just lucky that my Fallout 3 saves are not copy protected. That would have been enough for me to just say screw it and return the Slim.