While debatable, even to this day, the benefits - we prefer to utilize nothing but pure logic to justify the action of defragmenting. Like a messy desk, you tend to work harder trying to get things done because you have to sift through a bunch of unorganized crap before getting to what you're really looking for. The idea of defragmenting is essentially the same - and has been supported - the act of organizing files on your computer truly makes your hard drive run greener and leaner.
While the standard Windows defragmentation tool works just fine, many people prefer 3rd party programs due to convenient features such as multi-volume defragmentation, boot-sector defrag, and "set-it-and-forget-it" abilities. Thankfully Raymond, a favorite read of ours, did a roundup of the most popular ones out there and did a performance analysis of which one rises to the top. The results may surprise you.
Personally, we love PerfectDisk because of its intuitive interface and features. However, free is always better and it looks like IObit's SmartDefrag does essentially the same things, just with a less-fancy interface. Feel free to check out Raymond's blog to get the juicy details on how he tested the drives.