I would partially disagree with #7.
Defragmentation is much less of a problem with any Windows OS using NTFS, though it is essential on Win95/98/ME.
In most systems, the quest for "0% fragmentation" is a colossal waste of time... not to mention wear and tear on your HD. The performance "hit" of fragmented files is often nowhere near as bad as you think it is. (And of course it is vastly overstated by the various defragger vendors.)
Use PerfMon to watch the number of "split I/Os" on your HD, vs the total number of operations. If you find that the number of split IO's is less than about 10% of the total IO's, whatever file fragmentation you do have isn't bothering you much -- regardless of what the "% fragmentation" is.
I defrag once, maybe twice a year, if I haven't had to re-install XP in that time. If I have then I don't bother.
P.S: I've never used it, but a few peeps I know recommend O&O Defragger...there is a free version I think.