Defragmenting your hard drive is an excellent way to speed up the file access seek times on the hard drive, the slowest component in most computers. By re-writing the order of the files on the disk so that they are in one contiguous location, defragmenting the drive makes it easier for the computer to find and access files, and also easier to read the entire file at once without the drive actuator arm having to move to another location on disk. Imagine trying to read a book that is missing pages, or the pages are out of order. You would always be looking for the next page. This is similar to how a fragmented hard drive would operate.
There are lots of free defragmenting tools out there other than the built in windows utilities that provide very little feedback on progress. A couple tools that I like much better because of their visual feedback are:
Auslogics Disk Defrag:
http://download.cnet.com/Auslogics-Disk-Defrag/3000-2094_4-10567503.html
Piriform Defraggler:
http://www.piriform.com/defraggler/features
If you are looking for a couple disk defragmenting tools give these a try. You won't be disappointed.