I really like the idea of a hard disk connected to the GP32, and it will happen... although probably not all that soon.
The games that are around at the moment won't be able to load files from hard disk instead of SMC, but the things I can see it being used for include:
* An mp3/ogg player that plays from hard disk
* Store heaps of games on the hard disk, transfer to SMC to play them
* Take SMC card from digital camera (mine uses SMC) to GP32, use GP32 to transfer pictures to hard disk... good for long holidays without access to a PC
The GP32 linux that's in development (I haven't looked at it, presumably it's based on mizi's work
http://www.mizi.com/en/developer/s3c2410x) apparently has a working USB host implementation.
This is actually the reason that I bought my GP32, and although I haven't had the time to work on it as much as I'd like, it's still on my to-do list. Maybe someone will beat me to it!