Disk and/or file fragmentation is not the threat it used to be and whether or not it is necessary has become arguable. That said, I still defragment my files and the disk once or twice a year more out of old habits than any real or perceived necessity and I have never bothered to defragment before or after an OS upgrade or update and I have never had any problems. However, I have a large hard drive and it is less than 60% occupied so there is plenty of free space.

Given the high level of file fragmentation and relatively small free space on your HD if I were in your shoes I would
  1. run permission repair
  2. be sure I had a current backup or clone of your HD
  3. use CleanApp or a similar utility to perform a thorough housecleaning of your hard drive, deleting any unused applications, duplicated data files, unused preference and support files, and any other junk files you no longer need. The goal of all this being to free up as much disk space as possible.
  4. run a complete suite of tests and repairs on the drive using DiskWarrior, Drive Genius, or TechTool Pro to be certain the volume structure is in pristine condition
  5. use Drive Genius or TechTool Pro to defragment the files
  6. use Drive Genius or TechTool Pro to defragment the disk
  7. download and run the OS X 10.8.1 (Mountain Lion) installer from the App Store
While I am not certain all this is absolutely necessary before performing the upgrade it cannot hurt and it may well prevent potential installation glitches and it may result in better system performance overall.

If we knew what it was we were doing, it wouldn't be called research, would it?

— Albert Einstein