It can be a science and lengthy process, for the average user a windows defrag is adequate, but more often than not not something that would stress a pc`s general use outside of being so bad that the pagefile is all over the place.
After an install being extensively old, it`s a good idea.
More intelligent defraggers should look at files u have in terms of how often, if at all, they`re accessed and move them to a more efficient area of the drive surface.
Approximately a 3rd into the drive`s surfaces I believe is where the spin and access is approaching optimum, placing the fat around there, frequently used files next, then less frequent to little used ones next, then never used. All data for files being arranged in order to minimize head movement as much as possible.
Biggest factor for drive performance is the head. Everything else can be compremized by it afaic.
Average user wouldn`t be that critical tho imo.