Does partitioning increase speed/performance?

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.