Flyswift,
The W95, W98 and Me kernels are almost identical, and any HDD's controlled by these OS's will certainly need defragmenting at times. For a fully NON-DOS based OS you must go to Windows NT or 2000, and even then you must defrag the disks. The disk writing is taken care of by the on board electronics of the drive (hence IDE - Integrated Drive Electronics) or by the SCSI adapter. I run 12 W98SE machines, 10 W2kPro machines and 3 WNT4 Servers, all of which need defrags...!
Norton Speed Disk is by far the best Degrag tool, performace advantage over anything shipped with Windows (Including the new W2k defrag) is huge.
Aq