Basically what most of the free tools will do is defragmenting the files and placing them to the first place possible where it fits. The commercial applications, on the other hand, will use the smart way and/or ask you if you want to place the files according to the frequency of use, how often they change or you even could select the place for the individually.
These are probably the most-talked-about defragmenting tools on the web:
Diskeeper Pro: $49.95
PerfectDisk 2008 Pro: $39.99
O&O Defrag: $49.95
Total Defrag 2009: $29.95
All four of them have the upgrade options, which means that in a year or two if you want to upgrade to a newer version, you will have to pay around 50% of the initial price for the upgrade.
It is not the question whether you should or not do the disc defragmentation (which you obviously should) but which tools to use for that. If you are not concerned about 2%-10% increase in the performance that the commercial tools will give you, I guess the free tools will do the job. These days I use a free Auslogic Disc Defrag that works on x86 and x64 systems. See CNET the video and maybe it will be worth giving it a try.