With the fast hardwares right now and the speed of Windows 7, do we still need to defrag our hard disks? If not, why is it that it is still a part of the control panel?

Given the nature of hard drives and the way data is stored, defragging is always a good idea. It's just a good practice to clean up the hard drive and retrieve storage space.

Of course you could choose to permanently have de-frag running, but that takes up system resources. It means an efficient file system however, I've not experienced any fragmentation with it running.