Just for the record, I used to copy and delete games (1.5-3gbs) very often, thinking no defrag wouldn't be a problem.
Except about 3 months in, the newer games I copied would begin to hang during the intro animations, and the older ones would take ages to load (Timesplitters 2 especially, I could leave it on the loading screen for 10 minutes before anything would happen!!).
And a week later, the 80gb HDD made a high-pitched whirring sound and died.
So DO NOT copy and delete games or any massive files (1gb+) from your hard disk.
I read somewhere that the translucent green debug unit allows you to copy games to the hard disk, and I've seen an debug cd on ebay that claims to have a defrag util on it - which would make sense.