Every file in an NTFS's volume has an entry in NT's Master File Table. The MFT includes references to all folders and files stored on the NTFS partitions. MFT is similar to a FAT table in a FAT file system. When you convert your file system from FAT to NTFS, MFT is created and placed somewhere in the middle of the partition, not at the beginning like when you perform a fresh format. This causes slower access to the MFT and higher fragmentation of other files. A clean install using NTFS is always best. NTFS reserves a block of space for the MFT in an effort to keep it contiguous as it grows. To gain more control over new volumes (can't effect existing MFTs only those being created)

Hive: HKEY_LOCAL_MACHINE
Key: SYSTEM\CurrentControlSet\Conrol\FileSystem
Name: NtfsMftZoneReservation
Type: REG_DWORD
Value: 1 12.5% of free space, default
Value: 2 25% of free space
Value: 3 37.5% of free space
Value: 4 50% of free space

There is a new generation of defraggers that can work with the MFT and paging files. According to Microsoft, it is vitally important performance-wise to defragment the MFT and paging files. However, it is only safe to do so using boot-time defragmentation. Any "online" method bypasses the defragmentation APIs within Windows NT which Microsoft has provided for safe defragmentation, and can result in loss of data, data corruption, system crashes, or even loss of entire volumes.

Diskeeper and PerfectDisk 2000 and O&O Defrag DO NOT defragment these files online, but uses Microsoft's approved boot-time method.

If you know of other defraggers that use Microsoft's approved method, let know.