There is never any reason to reformat a hard drive other than to clear the FAT. In that case you can do a "format /q" (for quick format). If there are any problems with a hard disk, a format will not do anything to help.
If there are problems with the software that is contained on the hard disk then a format (and quick format) will just clear the FAT so you can reinstall.
If you have no indications from Windows that it is not getting the data correctly from the hard disk then the hard disk is just fine. If you are getting errors reported then it is best to back up all your data, download a low-level format from the manufacturer and do a low-level format and then a regular format and reinstall. If that doesn't clear it up you need a new hard disk. At that point, don't even think about, just go buy another hard disk.
When a hard disk has a lot of hours on it (30-50,000) some head wear will move the heads off the current tracks so the heads can't see the data fully. You'll get errors. A low-level format will realign the heads with the surface of the disk and you're good to go. The most common error is for a piece of dust to float around on the surface of the disk. One day a particular track will have an error and the piece of dust will move and another track will report an error where it was good the day before. Do a low-level and try it then go get another hard disk.
I usually only clear the FAT for an install of a new operating system or if the thing gets messy from too many installs and uninstalls. About once a year I guess. I seldom if ever actually format the entire hard drive unless it is new or I changed motherboards (hence new IDE
circuitry). Those two things make it necessary.
My main drive is 80Gigs, no partitions. Saves me a lot of time. I backup about 4-5Gigs of data, all automatically. I defrag about every six months, no more than a year. No need to defrag more than that unless you're reading and writing a great many files constantly.
How often do you reformat and why are you reformatting. Maybe we can offer some suggestions to reduce the number. Also, if you're using XP, maybe you can make more use of the restore points when installing software. That may help keep the system more intact.