Their a couple of advantages to defragging your HDD.
1. Improved performance especially if you are using over 50% of the drive space.
2. Increased life of the HDD because when the HDD is not defgramented the movement of the the read/write assembly which is a mechanical part on a HDD is reduced and therefore the life the HDD is increased
3. Improves backup speed
4. Improves security
As far as defgragging the Registry when using Windows 7 and a HDD this is a hotly debated subject on which those for and against are generally intractable in their opinions.