When files are stores on your computer, they are not all stored in one place on the hard drive. The file is broken into fragments and each fragment is placed where there is a free slot. Over time, files and folders can become excessively fragmented. This can cause files and folders to load slowly as it assembles peices from different places.
This is where defragmentation comes in. You can actually bring the peices of the files together and make them contigious so they will run without the extra lag. Here are instructions on how to defrag your hard drive with the defrag utility built in to Windows:
1) Click Start --> All Programs --> Accessories --> System Tools --> Disk Defragmenter
2) Click 'Analyze' and with a a few minutes while your hard drive is scanned for fragmentation. You will see a report showing how much fragmentation has occured on the drive.
3) On the Analysis Report, under 'Volume information:', scroll down to where it says total fragmentation. If your total fragmentation is 6% or more it is time to do a defrag.
4) Click the Defrag button and brew a pot of coffee and order a pizza. It may take a while to complete fragmentation depending on the state of your drive.