Why we do Defragmentation of our Hard Drive?

Defragmentation of a hard drive is the act of re-ordering the data on the drive so that each file can be read continuously from the disk. By default, Windows XP will attempt to store any files it needs to write to the hard drive in consecutive clusters (a cluster is the smallest unit of storage space available on a hard drive) on the drive, so that the file can then be read continuously. A hard drive which has been frequently used over a long period of time will have developed many fragmented files, files which are scattered over different clusters on the surface of the disk. This can occur because of many factors, for example uninstall programs that leave files behind, system crashes while in the act of writing to the hard drive, regular deletion of files, etc. A file becomes fragmented when the portion of consecutive clusters on the disk that Windows begins to write into is not large enough to hold the whole file. The remainder of the file then needs to be written to a different physical area of the disk. This does not have any effect on the operating system's ability to access the files themselves, but it does slow down disk access times (and by extension, any application that depends on disk access) due to the extra time needed to reposition the read heads of the hard drive to access the rest of the fragmented file. Windows XP includes a disk defragmentation utility which you can use to re-arrange the files on the drive and eliminate fragmentation.
This can have a significant affect on the speed of your computer. To access this utility, go to 'start\programs\accessories\system tools\disk defragmenter.' To begin with, you need to analyze your hard disk(s) to see if defragmentation is needed. Select a drive and hit the 'analyze' button. This could take a little while depending on the amount of data on the drive. While the system is analyzing, it is best to leave your computer alone or the process may need to restart.
Once the analysis is finished, you will have a graphical representation of your disk's level of fragmentation. See the picture below for an example of a highly fragmented drive.
Windows will also inform you if it recommends defragmenting the drive. You must have 15% of the drive free in order to fully defragment it. Anything less will result in only a partial re-ordering of the files. You may need to delete a few things to obtain this free space.
To defragment the drive, select it and hit the 'defragment' button. Note that depending on the size of the drive and the level of fragmentation, this can take a long time. It's a good thing to leave overnight, since you should not run anything else while doing the defrag either.