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The drawback to defragging is time, depending on how badly it's fragmented and how big the drive is, it can take a long time. And it may take multiple passes to really get it defragged. The benefit is better performance and, one could argue, possibly longer HD life since the head probably won't have to move quite as much on a defragged drive. It's a good idea to do time-to-time to keep your performance from degrading too much.
As for the spyware stuff, can't help ya there. But it does sound like you probably got a trojan of some sort.....
b
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