I generally almost never turn my desktop computer off due to using it so frequently, so instead I put it in sleep mode as opposed to turning it off.

My question is a (A) is this wise in the long run and (B), while I heard this prolongs hard drive life, does it negatively affect the life of any of the other components of the computer (like the power button light, which never really shuts off)

Also, I'm an avid fan of the program WinContig and I use it to defragment on a very frequent basis, to the point I run a defragmentation in between playing PC games, downloading files (before I open them), and even inbetween internet sessions almost religiously, and I was wondering if this a (A) wise in the long run to again extend hard drive life, or (B) if its is wise, is there a better defragmentation program available?

Excessive drive de-fragmentation is not only pointless, but will probably damage the drive if anything; mass read/writes won't do it much good.

And as for the life of the power LED.

Lol, just lol.

I wasn't all that worried about the power LED light

Whoops, forgot to post the rest.

Anyway, I meant to clarify I play a lot of games that have lots of mods and I modify them constantly, and I also do a lot of mod downloading, so I only defrag after doing a lot of large downloads, after mod editing, or after playing games prone to heavy save file fragmenting.

That said, it is still foolish?

I also tend to selectively defrag areas of the hard drive prone to defragmentation as opposed to doing regular full drive scans (like my Fallout New Vegas Data folder and the Users folders, so is that still foolish?

Yes, it is foolish to defrag so often. Besides putting extra wear and tear on the hard drive, you risk data loss or corruption each time you defrag in the event that you lose power while defragmenting. I hope you keep good backups.

And it's really not necessary to defrag so much, especially with Windows 7.

Unless you deal with thousands of relatively tiny files, that is.

I only (and you should) defrag once a month.

I don't remember the last time I defragged. I know it was more than a month ago.

On that note, I use texture/mesh optimizers to make certain mods use less VRAM/memory (they work like massive batch files, optimizing all the files in a folder at once), and after optimization I almost always have hundreds of fragmented files.

And, if what I'm hearing is true, it is stupid to defrag after installing entire programs (like Fallout New Vegas)?

probably, defragmentation is best performed on a routine basis but not after a specific action. Unless, as stated, you're using a billion really small files. Have you considered getting an SSD? It may be faster and more reliable for such purposes, i.e. that type of data storage, mesh optimization, etc.

Leaving things "fragmented" isn't particularly bad, it's just cluttered. If there are frequently-accessed files that end up split far across the drive platter, then it may cause more read-time than necessary, but ultimately it's not going to do a ton. It basically depends on the type of files, i.e. quantity vs. size, in the filesystem as well. Other people here could probably explain it more thoroughly or accurately, I rarely defrag as I think ext4 does something like that automatically. And I never remember to on Windows.

You don't have to remember to on Windows 7. By default it includes a scheduled task to perform disk defragmentation. So unless you turn that off or you never leave your computer on when it's scheduled to defrag, you don't have to worry about it.

I turned off scheduled defragmentation because I have an SSD as my system drive, and I prefer just manually using MyDefrag (when I remember) to on my data drives. It's levels of defragging and scripting abilities are quite awesome, though I've never really used the latter.

Just let the defrag programme you use decide when a defrag is necessary (that is, let the programme analyse your disk and if it demmes it necessary, let it defrag the disk). With NTFS you can defrag once a month if you use the disk a lot.
Hope it was helpful