Look, what you're proving here is hardly news, FAT file system was designed for small disks and simple folder structures. A large cluster size is what it allows you to have a large partitions and in fact it should help with fragmentation (imagine sifting through a large box in one case full with a million grains of sand and the other with a thousand smaller rocks). Your problem is large amounts of directories containing large amounts of files on a partition, making for a large and slow file allocation table. To give you an example, you say you have 12.000 thumbnails, UserData is split into 16 sub-folders (from 0 to F) to speed up seeking when looking for a thumb, meaning on average 750 entries per directory. Just for one thumb, it would need to seek through these 750 files to find the entry is looking for. Not to mention the similar work it had to do for each directory component in the path and find them in their respective directories in the file allocation table! And this is just to find out the cluster where the file's data starts on disk, before even reading the contents of the file!
http://digital.ni.com/public.nsf/allkb/ ... 8000681F58
Your best bet is to place XBMC4Xbox on the smallest partition where you can fit it, allowing for future expansion (thumbnails, library dbs etc) and / or with the simplest folder / file structure. Or for a future test with one of the boxes, try on an empty partition uploading a full XBMC4Xbox copy with all thumbnails and everything in it first, then copy your other content files and directories after.
Your last test results don't make sense to me really, no offence - there is no "nice, un-fragmented spot of HDD". Copying a 700 MB movie makes it slow then copying "whatever else" (how many files / directories, how large / small?) on top of it then finally removing the 700 MB to make it fast again? it all sounds a bit odd, especially if noticing a "huge" difference. When comparing results, you should wait for FTP server to flush contents of disk to quiet down before starting to navigate around, in order to get consistent timings. I would also check the System > Hardisk settings, like Acoustic management level = Fast and Power management level = High power, as those can affect HDD performance overall.