So do i HAVE to defrag? or is it optional?
Is it worth it? Usually yes. Especially if you've been deleting files or installing/uninstalling/reinstalling things. The more use (read: creation, modification) a files sees the more fragmented it's lible to become.
image from: BlueRaven's Vault
No, but not defragging is tantamount to not bathing.
Defragmenting your hard drive is kinda like organizing a bookshelf:
You're a process. You're given an index (the file allocation table). The index tells you were the book (file) you're looking for is in relation to all the other books (files). If your hard drive is fragmented, then it's like looking through a pile of books scattered about on the floor. If you're hard drive is in contiguous order, it's like looking through an alphabetically organized rack.
And try to remember: there HUNDREDS of THOUSANDS of books!
Having a heavily fragmented hard drive slows read-write operations (ie. everything) drastically, can cause errors in certain programs, and is one of the leading causes of the Blue Screen of Death. Fragmented hard drives make even the mightiest processor balk and cry like a baby.
Also, if you EVER call or write any tech support for anything, the first thing they'll likely tell you to do is defragment your hard drive.
I suggest you defragment at LEAST twice a month, but don't use that shitty one included with Win98, as it is really kinda slow. I prefer Diskeeper personally. It's got a nicer graphical representation, and it seems a deal faster.