Several points here...

what is bloat?

Is having 6 cd's bloat, or is having a minimum installation footprint of 600M bloat? Is a forced installation of sendmail bloat on a machine that will never be an e-mail server? Is it bloat to make the print spooler (and thus ghostscript) a dependancy to multiple packages that are merely able to print, but dont require it (especially when the user owns no printer)?

Is it bloat to include multiple packages of the same purpose (KDE vs. Gnome, sendmail vs. exim, bison vs. yacc, shell fun such as ksh zsh bash tcsh ash sash), or is that just including a wide set of flavors for users? I've always thought the large variety of choices is one of the things that makes Linux fun to use.

Perhaps it is bloat to include the source. (Ok, so it's a legal requirement. Does that make it not bloat?)

background installation is cool

I'd like to see the installer do more stuff in the background. Wouldn't it be neat if it could actually start installing packages before you are done selecting them all? Perhaps it could install the required base packages while you are choosing the rest.

Of course, while this would be very neat, it isn't really possible on small memory machines, and on high end machines, the whole install typically takes less than 5 minutes anyway, so perhaps it's just silly. I still think it'd be a cute trick.

automatic compilation during installation

lj points out that source is larger than binary. On the surface, this is true; however, many of the binaries legally require the source to be included--so if you include one, you have to include both anyway. Is the source still larger?

Also, when you say the binaries are smaller, are you considering the binaries for every architecture, or just your favorite one? Wouldn't it be cool to have a distribution with minimal binaries for every architecture, and then source, and an automated complilation process for the rest?

Of course, this wouldn't work for packages that can't have their compilation process automated, but then, I don't think this really applies to most things that have rpm's.

As to the CD whirring all night or the HD being full, the obvious solution to this is to copy the source you need from the cdrom, compile it, and delete it before going to the next package. I don't think this would be a big deal or a significant performance penalty.

The argument for instant usability and slowness on many machines is a very good point. It costs less than a dollar to produce and mail two cdrom's anyway, so what's the savings?