My brother said something once, that made me laugh and think..
"Windows is so complicated, it's like an organic phenomenon"
An installation not only gets better with age, through countless tweaks and settings... it kinda settles into "your" routine. If you have a LOT of software; the way you mess things up and the way Window staightens them out (frag-defrag for a simple example) can become a more efficient thing as time goes by (as opposed to how it all runs after a format and reinstallation of all that stuff).
I can't state this for fact, but have no trouble believing it: There are more than a few "if and or else" decisions made by Windows, that we don't even KNOW about (or why) that could actually go more than one way under identical circumstances (I guess that means that Windows might even "guess" now and then lol )... And, there is legend that there is "dead" code still floating around in there. Meaning: "They think" they debugged it and have worked around it, but are afraid to delete it

...
Anyway... I used to format 95 and 98 and ME installations on a schedule.. like maintanence. I don't format an XP install unless I know exactly why, or have run out of options, or have no choice.