In the past, I've used a free version of a defrag program called Ultimate Defrag.  Unlike most defrag programs, Ultimate Defrag lets you dictate which files get high performance priority and low performance priority.  It will then defrag your files and place them accordingly for the best performance.  The high performance files get placed on the outside of your harddrive where reading files is faster and the low performance files get placed on the inside of your harddrive where read speed is not very important.  To top it off, Ultimate Defrag has an option called Strict Placement, which forces your files to be sorted by folder structure and alphabetical order.

All defrag programs claim they boost your system performance.  While this is true, rarely do they consider the impact on gaming.  Lets say you install a brand new harddrive and you install a game on it.  Your game files will be installed in a natural order close to each other. But as time goes by and your harddrive space runs dry, new files and games must be placed wherever free space is available.  Files not only become fragmented, but they also become scattered all over your harddrive.  This can cause hitches and lag while playing games that frequently access your harddrive.

When you defrag your games with Windows Defragmenter or some other Defragger, what you're essentially doing is giving that defrag program the ability to even further scatter your game files all around your harddrive.  This causes game performance to worsen after a defrag.  Ultimate Defrag is the only program I have ever used that manages to intelligently defrag files without worsening game performance, and it keeps getting better.  Version 3.0 is just on the horizon and some of these new features are great.

Check it out