Defragging is less useful on more moderen Operating Systems that it used to be but can help performance a little. The old OS (Called DOS) used a very crude algorithym when writing to the hard disk. It was basically: Fill up the gaps on the disk and then start at the end of the last record. That menat that if yoyu did a lot of deleting and writing to the disck, files quickly became 'fragmented' that is to say bits of a single file could be scattered all over the disk. So defragging was important to maintain performance.
A more modern OS like XP is not quite as bad. However to defrag, go to: Programs. Accessories, System Tools, Disk Defragmenter. And be prepared for it to take a long time so do it over night.
Terry
February 2006