Does it stil make much difference, now that we have much faster and larger HDDs? Generally I find if disk performance is getting too slow, it's probably because of too little free space, and the solution is to buy a new HDD.
Answer
It is still relevant, but since the release of Vista, Windows has automatically defragged your hard drive when the computer was sitting idle. If you leave your computer idle for long periods, this is no longer something which must be done manually.
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