Here are some snips from an article in the February 2006 issue of Smart Computing magazine. They were using the Windows XP defragmenter for their testing. The general conclusion is that the benefits of defragmenting are highly variable.
"Our general system tasks included a WinXP startup, Word launch, and Adobe Photoshop 7.0 launch. When we tested Disk Defragmenter’s effects on a specific fragmented file, we used a WMV (Windows Media Video) file that was broken into about 32,000 fragments.
As the results in our chart indicate, Disk Defragmenter does improve a drive’s performance, but it seemed like only files that were fragmented tended to benefit from Disk Defragmenter. For example, our first PC (with 41% fragmentation) averaged 24.55 seconds to load WinXP, but we only shaved 0.44 seconds off the average time when Disk Defragmenter reduced the level of fragmentation to 10%. Our second PC (with 15% fragmentation) averaged 33.81 seconds to start WinXP but then slowed to a 34.49-second average after we defragmented its hard drive.
Defragmenting specific files yielded more promising results. Our fragmented WMV file, located on a 60GB partition with 49% total fragmentation, loaded in an average of 1.81 seconds before defragmentation. After we ran Disk Defragmenter, the file opened in an average of 1.09 seconds.
The help Disk Defragmenter provides can vary according to which files are fragmented.
Defragmentation affects each PC differently. Variations in hardware (primarily the CPU and memory) can yield wide-ranging results, even if both drives have identical fragmentation levels."