it has been said that no game files will be changed, in other words mods will work somewhat like .maps, you place them in a folder and the client tells the game to load them..
@ iam2noob4u: yeah smaller files could be transfered 'on the fly', but many ppl will want to play mods like Liberty City, Myriad Islands or one of the many TCs.. sure they'd need to be tweaked a bit since you don't need mission scripting etc
isn't it too early to talk about these things though?