I have a few interesting questions.
1. Does formatting the computer cause more negative effects than defragging?
2. Does putting a lot of icons on your desktop cause issues?
3. How can I increase my icon cache? It takes a while to load icons sometimes.
4. Can having a ton of programs cause issues on your computer but not a ton of programs running at once or even from start up? I have 117gb of space out of 143gb of space left but lots of programs.
5. Does Windows 7 Ultimate have higher minimum requirements than Windows 7 Home Premium?
I'm not sure what type of negative effect do you expect from defragging your hard disk. Yet, there is no negative effect from formatting, except that of course, you loose all your data inside.
I tend to keep my desktop clean but I never heard of any negative impact in performance.
I don't know if you are able to increase it, but in case your icons are corrupt, you can run the following command in CMD to recreate them:
CD /d %userprofile%\AppData\Local
DEL IconCache.db /a
Since Windows keeps using a registry, despite the fact that you are not running the programs, or enabling them at startup, having plenty of installations may slow down your computer a bit. I advice you install CCleaner and run the registry cleaner to see if it improves.
According to Microsoft, Ultimate and Home Premium have the same hardware requirements. Only Home Basic has less requirements that other versions.