BernardStewart,
I like the idea. But why would this prevent defragmentation? If the argument is that the pagefile would be the only file on the partition, I am not sure that is sufficient.
If you combined your tip with a sufficient Minimum size (so that XP does not have to enlarge or shrink, usually), or set Min and Max to 4 Gb. (so the pagefile is static, essentially) it is an interesting proposition for those with large drives.
Bill