I've been playing the disc based (non GOTY) version of Borderlands for awhile, and I think I'm interested in snagging the d/lable version with the dlc for $15 on PSN right now. My question is, if I download the game to my harddrive and install it, will it erase/corrupt my current saves or even worse crash the HD?

and if it doesn't erase/corrupt my current saved progress, will it be smart enough to recognize it if I load it up on the hard drive?

Save your current saves to a usb drive just to be sure. I really don't think you will have a problem though.

I know that with Burnout Paradise, they had that problem for owners of the disc-based game who got the downloadable one later. Haven't heard of that problem with Borderlands, though.