You save your game progress in the game. For Fallout, you can save just about anywhere by pausing the game with the Start button and going to save. I think you're confusing regular save progress with a function the 360 has where you can install a copy of your whole game from the disc to your 360's hard drive. Doing so is not mandatory, but it does help with reducing loading times, the wear on your 360's disc drive, and noise reduction. to do that, put the game in and if it starts up, hit the guide button (the lit Xbox 360 logo on the controller) and hit Y to go back to the dashboard. Under My Xbox, select the first box and hit Y. Choose the install to hard drive option.
*You do still have to put the disc in the disc drive when you want to play the game so it can verify that you have a copy of the game.
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