Don't install Skyrim on your 360 HHD just yet

Skyrim uses a lot of dynamic streaming systems, including textures. We’ve seen a few reports of certain textures temporarily scaling down on the Xbox 360, and not scaling back up. We have verified that this issue does not occur when playing off the disk and when the game is fully cached (not installed). Skyrim makes heavy use of the Xbox 360 caching system, and caches over the normal course of play while in menus or interiors. This cache can be wiped when other games are played or when the user manually removes it. We’re working on a solution in the next title update for those who have installed the game.

http://videogamewriters.com/dont-install-skyrim-to-your-xbox-360-hard-drive-just-yet-29288

I've been playing it installed, there have been maybe two times where I saw a shitty N64ish texture. My 360 makes so much noise playing not-installed games, I install everything.

I've been playing with it installed on my PS3 and everything looks perfect so far. Imagine that.