That simply depends on whether the game strictly installs the needed files to the drive or requires a disk to load files while the game is running. Some games requiring a disk may be able to run if you can create a virtual drive even though the files have been copied. That would be rare though mainly due to the compression seen with large game maps.
I'm not very familiar with US law, but isn't backing up an original CD/DVD legal, he would only make a virtual drive and then load it from there without having CD/DVD in CD/DVD-ROM.
To run an 8bit dos application in XP you would create and mount a virtual dos drive through the 16bit command prompt. Copying any protected material for PRIVATE USE ONLY is all too common. Any distribution of protected materials WITHOUT the express permission of the owner gets you into ???! deep.... But copying files off a disk to run them there would be on that drive alone. You have already purchased a retail software to run where? On Your Machine only.
The idea here however is to get a game already installed to the HD to run without the software disk in any of the system's drives. Again this depends on the way the game was designed. To create a virtual drive to run the game after copy to the drive would require a software utility designed for that.
NO, you are not allowed to discuss this here, as has been discussed a lot recently. If users are found to be continually discussing this issue certain penalties will be issued.