The install data in the ISO isn't touched at all by the game when playing without installing to memory stick. (You sometimes see uploaders rip install data out of the game to save space).
And to answer your question, yeah it does take up more space.
But those few seconds are kinda needed on games like Peace Walker.
When playing with my cousin (I have a Go, he has a 1000), I deleted the install data to try out another game and forgot to install it again.
When entering different areas, his always loaded a few seconds faster thus leaving me out and when we 'completed' the game, the final cutscene on mine was a few seconds delayed.
I don't know if it would work or if anyone has tried it but if you really need that extra space, there is always a possibility that installing the data and then delete the data from the ISO could work.