There is an interesting discussion over at Ars' Mac Forum which reveals that OS X 10.3 (or any builds since Darwin 7.0 Kernel) has automatic file defragmentation. Basically, when a file is accessed, a check is made to see if it is fragmented (split into several different sectors on the Hard Drive), If so, and if it is less than 20 MB in size, the filesystem will copy the file over to a contiguous area on the HD that will hold the file in it's entirety in concurrent sectors, and then free up the HD space the fragmented version used to occupy. Dig Deeper for more information on the new Panther tech.
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