I would prefer to advise users to spend a small amount of additional money for what has become a relatively inexpensive, larger hard drive, but would they take the advice with the economy tanked....
According to Apple it is not necessary to defrag, and not recommended on a boot drive:
http://support.apple.com/kb/HT1375?viewlocale=en_US
Without knowing more, it's probably most likely that the OP will fail to see even a minor benefit.
Nevertheless, it is an Apple recommended procedure in certain situations, so not at all extreme from that standpoint - refer to the "Using Disk Utility" section:
http://support.apple.com/kb/HT1553
Simply follow both sets of their "
>Instructions" in the section "Using Disk Utility." In between performing the two sets of instructions, to ensure that the hard drive is viable for accurate storage of valuable data, use the zero erase procedure in Disk Utility. This will "map out" unusable sectors.
Unfortunately, an archive and install is not without risk - for example, over-filling the internal hard drive with one or more archived copies is an invitation to corrupted data. How does the average person recover from corrupted data? They come here and ask why their three-year old hard drives are so full and useless (after they've archived three times without deleting).