Ok, let's break this bosses "opinion". Here are some of the specs on a hard drive taht I will use in my example. (The specs are for the new WD 36.7 GB 10k SATA HD.)
Bytes Per Sector 512
Average Read Seek 5.2 ms (average)
Track-to-track Seek 0.7 ms (average)
Full Stroke Read Seek 10.2 ms (average)
So your boss says defragmenting will "clobber the clusters". I bet he also thinks that having alot of small clusters increases the utilization of the disk because small programs can "fill in the cracks". This just isn't so. If you've ever watch the Analysis part of the Defrag program it shows you a rough picture of how te drive is fragmented where the color red means fragmentation and the other colors have various meanings. There are various hardware/software ways the computer breaks up files into fragments, but just looking at the hardware part here it is:
So the Average Read Seek for the stats above is 5.2 ms. This means that on average when you have to do a read and you are not on the track then it usually takes around 5.2 ms to find the track and read from it. This is opposed to Track-to-track Seek which means that you are consecutively reading from the tracks next to the each other. If you noticed the Track-to-track Seek is MUCH lower than the Average Read Seek. A fragmented file means that the data of that file is not in tracks consecutively, but rather in tracks on different parts of the physical disk. Which means that if a file is fragmented then for each fragmentation it has to perform a Average Read Seek motion. For large files this could be MANY of these motions causing a delay in execution. Conversely, when you defragment you are sorting the contents of hte hard disk so that, if possible, there are as few fragments as possible. Say that you have teh "perfect" defrag experiece and every file is located in consecutive tracks, then that means that the hard disk would be performing a Track-to-track Seek motion which again is much faster!! So by defragmenting you are lining up the files so they can be read and accessed much faster than if they were fragmented throughout the disk. A side effect benefit of defragmenting is that you also end up with large blocks of unused space, which can help in writing data to the hard disk.
Anyways, I just thought you should know the REAL benefits and not what some "know-it-all" thinks.
Let me know if this helps.
Burke