porche, i couldnt disagree with you more there
the read/write performance of your HDD when it comes to non-sequential RW ops will be TERRIBLE compared to it's sequential performance. remember the the heads will be bouncing all over the disk trying to read all the little fragments, which takes time and slows performance.
say youve got a 5ms seek time, and your file is fragmented in 5 parts... thats an EXTRA 20ms to read that file than it would be if it wasnt fragmented!
the reason defragging is not so relevant nowadays, is that NTFS is SO much better at organising files, thet's it's quite rare to seriously fragment your HDD unless youre constantly copying/deleting stuff. plus the content that normally ends up getting fragmented (data files, like say movins, mp3s etc.)isn't so sensitive to data transfer througput