Defrag most deffinatly works for IE probs in win98 but im not so sure about XP and as for removing/re-installing I'm sure you need a tool for this from Microsoft as IE adds so much info to the registry.
Myself I would try colt's suggestion as a defrag should be generic solution for slow programs and you should do this anyway.
Here's a great way I found to speed up IE the most. At first I had set my homepage to about:blank, but this still took too long to load. So in my shortcut for IE, if you right-click and select properties, and then in the target box, add "-nohome" (w/out quotes) after the filename. Then IE will load just a little bit faster, since it won't load a webpage (even about:blank), when it starts. The text in your target box should read like this: