actually dantec is pretty much right. although norton will defrag the drive its optimizations are set for os9, and therefore are well known to cause problems in osx (sometimes even making the system slower or unbootable). i refuse to run norton on any osx machine until they release an osx version, and anyone who does, is gambling every time they use it.
there is a lot of misinformation flying around this thread from both sides (in addition to far too much childish name calling. so i will say keep it 'cool fellas').
the root of this problem that chibianh is having is RAM not fragmentation. this was pointed out before the thread got hijacked but little info was given as to the details.
512MB is not enough RAM to run osx well. Things will be fine at first but after a day or two of normal use, or a few hours of heavy use the system will grind to a halt. So what is happening? people like to say 'osx is a ram hog' with little explanation.
i dont understand it completely but here is what i know. when you first boot up osx with all of your main apps running you will not likley use more than 250MB of ram. but you will notice that when you quit an app, the ram that was taken up when that app was launched is not completely freed up into the system. much of the ram remains unavailable. this is because osx caches a lot of information into ram. ever notice the first launch of an app takes a lot longer than any subsequent launch? this is because some info has been cached. so if you only have 512MB of ram, after a few days the ram gets full of various bits of information that has been cached there and so less ram is available for actually running apps.
so what happens when all the ram is used up? pageouts. or Virtual memory (VM) if you want to use os9 terminology. the os starts using hard drive space as ram. this is a lot slower than ram and so when your computer is writing or reading from virtual memory (hard drive) things will slow down as you mentioned. you can free up a little bit of ram by logging out, but to really clear things up you need to restart.
some people mentioned swap drives. what this means is they have set a hard drive or a partition aside just for virtual memory. the theory behind this is that if you use your main disk as VM then it can become fragmented. if you use a dedicated partition then the drive will always have a space set aside for VM that will remain unfragmented. Also if you happen to have a drive set aside just for this (rather than a partition) then the arm will be waiting for you to use the VM and will access it quicker. most people report that post 10.1.2 they didnt see much fo an advantage to using a swap drive, although if you are interested and dont want to dive into the terminal there is a freeware app called swap cop (find it at version tracker).
but really if you want to avoid this system hangs caused by ram the only thing you can do is buy more ram. most people who have 1gb or more never report having problems. seems excessive but its about all you can do, and ram is cheap again.
as far as speed issues due to other problems the there are three things you can do. update prebindings (optimize), run your nightly scripts, and defrag (optimize).
Updating prebindings is the big thing for speed in osx. there is a terminal command to do it and MANY freeware and shareware apps that do it (they all use the same terminal command, so they are all essentailly the same). many people run into problems updating prebindings. the big thing to remember is RESTART. so i would suggest using speedmeuplight if you are not comfortable with the terminal. so restart before running update prebindings (people are calling this optimizing for short). run update prebindings. restart twice afterwards. if you do not restart afterwards your system may actually become slower!
nighty scripts. your machine runs three scripts aroun 3am at night. if your machine is not running then these scripts can not be run. one script is run every day. one every week. and one every month. again a terminal command can execute these for you, but if you are terminal-phobe then there are a couple apps that do this for you. MacJanitor and Cronathon. there is no harm in running these too often, but you really only need to do them as often as each one is designed to be run (daily, weekly, and monthly).
defragmentation (called optimizing in os9 lingo). defraging requires a commercial software title such as Speed Disk from Norton Utilities, or TechTool, or Diskwarrior. Norton is the only one right now with osx support (though not complete). Micromat who makes techtool offer an osx title called Drive10 but it does not optimize. To run these software titles you should boot off the cd (all but drive10 use a os9 boot cd). Norton has always had the best optimization tool (speed disk).
Before running any optimization tool you should follow the instructions for the particular software title you are using. usually this entails running disk maitenance first. in the case of norton this title is called Disk Doctor. Again disk doctor is not designed for osx and has been known to 'fix' problems on an osx drive that are not real problems and will sometimes even make things worse. but even in os9 you will see that 'problems' found by these software titles are usually imaginary. techtool, norton, and diskwarrior all have different ideas about what is a problem so if you run them all you will see that they fight eachother a bit. norton undoing somethings techtool did and vica versa. optimization in norton and diskwarrior seem to be at odds as well.
but what is fragmentation? alpha described it briefly. basically what happens is your machine is writing and deleting information from the harddrive in an unorganized fashion based on your use. so if you write 5 100 MB files to the hard disk then delete 2 of those files there will be gaps in what has been written. what i mean is initially a 500MB section will have info on it but after deleting 2 of the files you may have 100MB written then 100MB free space then another 100MB written and another free space and so on. so when you come back and want to write a 200MB file to disk that file will be split between the gaps.
So with thousands of files you can see how files are going to get split up quite a bit. This means when the computer wants to access a file it has to access a bunch of different areas of the hard drive in order to access all the information, and this takes time. So what defraging means is it takes all the fragmented files and puts them together so when your computer accesses a file it can find the file all in one space. UNIX systems use lots and lots of different files to run things so the potencial to fragment a drive is tremendous and has the potencial to really slow a system down.
but norton does more than just defrag. it 'optimizes' as well. what this means is that it organizes the files as well as defrags them. this is where the os9ness of norton can cause problems. norton is designed to put certain types of files in certain places (it even has a number of different configurations you can choose from depending on your needs). so norton puts all the system files in one area, all the media files in another area, all the application files in another area. this makes accessing files on your drive much easier for the hard drive since it can find similiar files in the same general area.
the problem is that right now norton does not recognize osx types of files, and will cram your system files into a general category with a bunch fo other unrecoginzed stuff. This is where it can cause problems. problems are rare but experienced techs will have many stories of people who have screwed up their drives because of norton and osx.
Most people are simply waiting for an osx version to become available before using norton on a osx partition, others throw caution to the wind and just try it (it works MOST of the time so who cares, and if a system already is having problems you cant make things too much worse right?). i would suggest backing up everything and being prepared to wipe the drive and reinstall before ever using an os9 utility like norton on a osx drive (9 times out fo 10 you wont need to use your back ups, but its that other 10% of the time that you will be glad you handled things safely).
sorry for the long post but so much misinformation was being spread i thought i should try to clarify things a bit.