I've actually never defragged my drive... and i've had it set up for a few months. I've not really noticed any performance hits really except for it maybe being a bit slower at startup... I just never have time to run it, and can't run it over night because the computer is switched off (its in mine and my bros room) and people use it all the time in the day, and switch partitions, etc.
I thought it was unadvisable to run it while other programs are running since it has to move things about on the disc and could affect defrag if other things are used on the drive at the same time...
I will try and defrag though, since I know it is an important process sometimes. I do believe it can caue problems though after alot of uses (when I say alot, I mean alot)
Are there by any chance any free programs that are better than the Windows Defragger? Or inexpensive ones?