That's where the problem comes in Jim.
If you take a file from some folder, and move it -- you will fragment your drive. So you may have your 10 mb MP3 file scattered all over your drive. Then, when the read head is trying to grab the file, it has to bounce all over, to pick up the pieces.
I use DiskKeeper on all my computers -- it will not allow files to get fragmented -- it writes them contiguously. If you don't use Diskkeeper, at least run the Windows defrag once a week.
Technically, if you 'move' a file, you're only moving the pointer. If you delete the file and write over the space, all or part of the pointer is no longer valid. Putting a new file in its place will create the file in the old space (if it can all fit) or part of it in the old space with the balance in a new space (fragmented file). The second you slightly modify a files contents, it becomes fragmented. Moving the file will not fragment it - as you're not physically moving it.
More:
http://technet.microsoft.com/en-us/magazine/2007.11.desktopfiles.aspx
How Does Fragmentation Occur?
Fragmentation occurs because files change over time. Ideally, Windows files themselves don't change. Or at least they don't change very often—really only with service pack and software update installations. Otherwise, the system files remain relatively constant. After performing a large update such as the installation of a service pack, fragmentation will naturally occur since the files being updated usually cannot be overwritten where they are on disk—and may require a reboot to be updated—resulting in further fragmentation.
User files and data (and the Windows registry), on the other hand, are subject to constant change. Reading, writing, editing, copying, and deleting files all the time causes a great deal of fragmentation, especially as the drive capacity is filled.
To visualize this, imagine a perfectly arranged disk, in which files occupy space contiguously with no space between them. Suppose you open a file and edit it, and then you try to save it. If the file has grown, Windows either has to save the file in its entirety somewhere else on the disk (imagine after file N) or save the newest data after file N. This means file 2 is now fragmented. If you now edit file 1, you'll have two fragmented files. Keep repeating this over time and you will end up with a considerably fragmented system where the drive has to look in multiple locations to access an individual file. With large database files, expansive hard disk files for virtual computing technologies, and copious amounts of video and audio stored on the average disk, fragmentation is common. Of course, the ever-larger size of current hard disks makes fragmentation less of a problem, but it doesn't make it go away. And older laptops with smaller hard disks will become less and less responsive, slower to boot, and take longer to open and save files.