I realize this post is going to be met with tons of controversy... I'm not here to start anything. This is just my opinion:
I never defrag because I simply can't detect a single performance improvement on modern hardware. i don't believe it has had an impact since the days of the 486s. Honestly.
My work PC was some 66% fragmented and running like garbage (and it has no spyware or anything to bog it down abnormally). Anyways, I defragged it and it went down to about 2% fragmentation. At this point, I didn't feel it was any faster than it was before.
Not only that, but you need to be careful because NTFS formatted disks run the risk of fragmenting the MFT (Master File Table) the more that files are moved around, and if this is fragmented you will notice a performance drop.
There's a whole thing about drive interleaving, and logical-to-physical translation that I won't really get into. But usually the way that the OS thinks the data is laid onto the disk isn't acutally how the drive winds up doing it anyways.
