, saying that the effort involved to push all the free space together would negate any possible performance benefit.
I would argue that fragmented free space really becomes critical only when free space on a hard disk drive becomes extremely low—i.e., when the only space available is badly fragmented free space, and the system is forced to create new files in a highly fragmented fashion. But on a large enough drive, where the free space isn't allowed to go below 30%, this should almost never be an issue. There may still be fragmentation of free space, but large enough blocks of free space will almost certainly always exist somewhere on the drive to ensure that files can be moved or newly allocated without trouble.
I mention the 64MB figure as an adjunct to something I saw in the defrag utility now bundled with Windows Vista. By default, this utility will only attempt to consolidate fragments smaller than 64MB. My guess is that a fragment larger than 64MB is not going to impose as much of an overhead. Even if you have a very large file (a gig or more) broken into 64MB fragments, it won't matter as much because you're never reading more than a certain amount from the file at any given time. That is, unless you're accessing several such files at once, in which case the impact of fragmentation will take a back seat to the mere fact that you're reading multiple physical files from different parts of the disk.
3. Third-party disk defragmentation programs have more robust feature sets than the native Windows defragmenter.
This is undeniable. The native Windows defragmenting tool has only a fraction of the features offered by many of the commercial defragmention products, such as the ability to defragment system files after a reboot or to defragment the master file table (MFT) space.
But do these additional features justify themselves? That tends to be a factor of how aggressively the file system needs defragmenting in the ways that only a more advanced defragger can provide. For instance, on a file system where the MFT isn't trafficked as heavily (i.e., there aren't hundreds of thousands of files being created) and not at as great a risk to be fragmented, MFT disk defragmentation won't be as useful, since the MFT isn't going to be fragmented much to begin with. On an extremely busy server, this would be more useful; on a workstation with a lighter file-creation load, less so.
While the MFT zone can be defragmented offline, it cannot be shrunk or resized, and no third-party tool can do this. The only way to resize the MFT if it's been expanded is to copy all the files off a volume, format it, and copy them back on again. On the other hand, NTFS re-uses space within the MFT itself if there's no other free space to be had, and the MFT should almost never grow to be a sizable percentage of the drive's space. A tool like NTFSInfo from Sysinternals can give you details about the MFT zone on a given drive. If for some reason it's become an abnormally large percentage of the drive's space that might be a sign of something else being wrong.
There are other issues that I researched but came to no firm conclusions on. One, which is tangential to defragmenting free space, is the file placement issue.Windows XP, by default, analyzes file usage and tries to optimize access patterns to the most commonly used files in the system every three days. Some defragmenters (for instance, PerfectDisk from Raxco Software) work with this information to further optimize file access patterns, but it's not clear if this really does produce a performance improvement that's lasting and quantifiable.
(Incidentally, defragmenting the page file or Registry can be done without having to buy a separate application. For instance, the free tool PageDefrag, is perfect for this sort of work.)
In conclusion, I want to emphasize and clarify three things that might have gotten lost in my discussion.
Fragmentation still exists and is a problem. I was not dismissing its impact wholesale. But its impact has been alleviated by advances in hard disk drive technology, operating system design and file system design, and its impact will continue to be reduced (but not eliminated) by further improvements in all of the above.
It's still a good idea to defragment regularly, but there's little point in doing it obsessively when the real-world benefits might not be measurable in any reliable way. More than once a week for a workstation seems to cross the point of diminishing returns (although there are exceptions, which I'll go into). But the investment of time and system resources required to defrag once a day doesn't pay off except in the most incremental and difficult-to-assess fashion. (One exception to this would be programs that defragment progressively and "silently," like the aforementioned Buzzsaw, which usually run when the system is idle.)
You should balance the act of defragmenting against other ameliorative actions that could be taken, such as buying a larger or faster hard disk drive or adding more memory. Drives are cheaper and larger than ever. Memory is cheaper than ever, too. Adding more memory or upgrading to a faster, higher-capacity hard disk drive will almost always yield a better performance improvement than anything you can do through software.

Disk Defragmentation Fast Guide

Introduction
Disk defragmentation: Performance-sapper or best practice?
New hard disk drives reduce need for disk defragmentation
Four steps to lessen the effect of fragmentation.
Flash memory drive defragmentation: Does it make sense?
Three disk defragmentation issues defined
About the author: Serdar Yegulalp is editor of the Windows Power Users Newsletter, which is devoted to hints, tips, tricks, news and goodies for Windows NT, Windows 2000 and Windows XP users and administrators. He has more than 10 years of Windows experience under his belt, and contributes regularly to SearchWinComputing.com, SearchWindowsSecurity.com and SearchSQLServer.com.