Unless you use nlite or something similar, you won't be able to remove IE very easily, if at all. And if you do, quite a few things in WindowsXP may not work properly. Many programs use the IE rendering engine to display things on the screen and without it, they won't work. You should keep IE for checking the Windows Update site regularily anyways.
Defragging will speed up your computer only if the files on your hard drive were fragmented. As has been noted, with modern drives this isn't as big of a deal any more. If you also have plenty of RAM, more than 512MB, the pagefile won't get too fragmented either.
PC companies love selling people new computers to replace the old "slow" one they have at home. In reality, unless you are running a new program that needs more power, your computer should run just as fast as the day you bought it. If it is slower, it probably just needs to be cleaned out as everyone else has suggested.
goates