Does partitioning increase speed/performance?
If so, what is the best way to implement it?
The best way to partition for performance is to buy drives as large as you can afford and then create just ONE partition that is no larger than you need. For example, buy a 1TB drive and partition it down to, say, 100GB for the OS (assuming that the OS and all your apps will fit into 100GB of space).
The reason this works is that it forces all of the data to be in a narrow band close to the outer edge of the disk - this is where you get the fastest transfer rates, and since all the data is close together the access arm never has to move very far to find data. Short movements = faster access. Do a Google on "short stroking" for more info.
You can put TWO partitions on one disk in order to separate the OS and your data, but this is mostly a benefit in terms of management of the files and doesn't really give that much, if any, performance advantage. This is because the disk arm will have to move further (and thus take more time) when it seeks between files in the OS folders and in your data folders.
just like sminlal said. partitioning the drive is useful for organization. it is also useful if you reformat your computer, but do not want to lose your data, for you can just format a single partition.
to partition your drive, i would suggest to resize the partitions before you install the OS. if its windows, you cannot resize a partition within it. though, if you already have an OS installed, but just want to resize a partition, then i would suggest downloading a live cd called Knoppix. it will run on your computer without getting rid of windows, and a program called qtparted will allow you to resize the partition as needed. though, if you do walk that path, just be sure to defragment your drive first