If the files are 40mb or smaller, it defrags them, if not, it lets them go where they go.
Over time, it works out. YOu will notice a *slight* gain if you defrag, but then you're right back to where you were before in a month.
Now if you want *speed* these new SSD drives (not the slow ones that Apple sells, the fast Intel and Samsung) are the way to go with newer hardware, but pricey at $600 for 256gb
To give you an indication of how fast these drives are:
http://www.youtube.com/watch?v=8Ycu7hxGyqE
My next Mac will have a super fast SSD in it. Once they break the 320 or 512gb barrier.