If you’ve been around computers for a while you’ve almost surely been told that regular defragging of your hard drive improves performance. This might be true for drives older than 10 years or so, but modern HDDs are a lot quicker, because of this defragging (afraid to say) doesn’t usually help that much to improve performance. Defragging, however is not entirely useless.
If you’re using virtual PC or VMWare images, you need to pay special attention to the state of both your host and guest drive (usually a file on the host). Usually when you work with a virtualization solution, you’ll want to squeeze as much performance out of the hard drive as possible, this is because HDD I/O is the biggest bottleneck in virtualization performance. I wouldn’t go as far as buying additional defrag tools, but ensure you keep both drives defragged on a regular basis. This does not mean everyday, just at least once every 6 months.
If you’re a windows user, the chances are you’ll need to format and reinstall your copy of windows before your drive can get fragged enough to affect performance.