I'm treating this as a supplemental game description; others have adequately reviewed the gameplay elsewhere. For those wanting a one-sentence summary: the DLC does appear on newer discs, but as of Jan 2011 it is difficult to tell if you're getting a "new" DLC-on-disc version or the older version with just a voucher. (Maybe the content is on all GOTY editions and an update will unlock it one day?)
I was torn before ordering from Amazon, but pulled the trigger on a buy 2, get 1 free sale. I'm new to the ps3 as of this Christmas and am having fun buying up older, established games for cheap. Borderlands fits perfectly into this category, so if you're on the fence and want a quick push either way: BUY IT if this type of game is your thing.
The DLC is now on the disc. I was VERY skeptical that it would be, as the (almost) unanimous consensus online said otherwise. Only a few recent posters claimed it was on there, and I dismissed them as trolls or uninformed. I bought anyway. The front cover of my game says very clearly at the bottom "Voucher for All 4 Add-On Packs." On the back, in a yellow band? "Add-on game content requires a connection to Playstation Network and 4.41 GB of storage space to redeem SINGLE-USE VOUCHER."
I was bummed. I held out opening up the disc, on the chance that maybe a newer version had come out, and Amazon had sent me an older one. If some (newer) copies did have the DLC, I wanted that one! But I couldn't find anything online about a new cover, omitted text, or anything else pertaining to the voucher.
I opened up the game and popped it in - and there it is. Below the Borderlands game icon in the XMB (Playstation menu, NOT the game menu.. where I first looked). There's a little disc icon that turns into an orange, one-wheeled robot labeled "BONUS CONTENT."
Sure enough, all 4 add-on packs appear here. The smallest is about 550MB, the largest is 1.6GB. No code needed... but a voucher code is still included. Mine was behind the map, before the instruction manual. I have not used it, but I did install the expansions to test - they install with no code and appear in-game (the menu tells you they're available and you need to go to a fast travel station to get to them).
As of this writing, the "most helpful" one-star reviews bash the decision to not include the 4 expansion packs on disc. I can understand this, considering other games (Fallout 3 GOTY, which I purchased along with Borderlands GOTY) DID put the content on there. It made the game feel disposable - once your voucher was used up, your resale is the same as the regular BL game. I am thankful for all those who complained. I can't help but think someone somewhere heard your logic and agreed.
Here's the problem - as of now, there's no way to tell what version you're getting. I bought mine from Amazon so I can confirm that at least one batch of theirs has it - but that's not to say everyone will get a "new" version. Same in-store. There was nothing physically on the outside that told me I was getting bonus content on disc. So until all of the old stock is purged, there are going to be some disappointed consumers. Even after that, there's sure to be fraudulent after-market sales of used GOTY editions.
Good luck in getting the version you want, and enjoy the game - I'm pretty stoked about the hours in Pandora front of me.
------------- Until it becomes established knowledge that there are in fact "on-disc" versions, check Gearbox & 2K's forums for official word. As of Jan 2011, I still feel things are speculative among the online community of BL players, even though I can personally confirm vouchers are not needed for the newest printings. This is what you get when game developers waffle, but I thank the powers that be for getting it right; sorry to those who "suffered" for the rest of our benefit. ;)
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