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Programs => Accesories => System Tools => Defragment If you haven't defraged your hard drive your in for a treat... you will experience speed you haven't thought possible if there really hasn't been any defrag since you got it. However if this is the case it will take a loooooong time maybee a couple of hours or more depending on your harddrive size. Mine can take up to four hours if I haven't done it in awhile (I got a really big hard drive). Now, the "risk" is that excessive defraggin' will "wear out" your hard drive faster. In reality it is negligible wear and tear and is actually something you should do about once a week if your doing a lot of recording of audio so that all the audio files are together and stream from disk faster.
There is no need to back up just to defrag but you should always back up your ish every so often anyway. I burn dvds of anything important about once a week. The cool thing about using DVDs is that you can date em and if you check them you can delete alternate versions of songs and such giving you more hard drive space which means drefragging wil take less time. Defragging can make loading vsts faster, cause less crackles n pops in audio... in short, even though (if you have a large hard drive) it can take awhile it's worth it. It will make everything else faster as well. Now it is possible that you have some sort of automatic defrag goin' on (in Vista for example) I turned that off cause the constant defragin' was causing audio dropouts and stuff and I do it once a week or so. Hope that helps.
I'd also go for a third party defragger. They are usually way better than the default Windows defragger.