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Good question - never tried it but...
I suspect that a full backup, re-format and restore of your card shouldn't affect any apps installed onto the card. The information for launching the apps will be kept locally to the PDA. (E.g. Registry information et al). I tend not to install to cards though. Unless you are doing a lot of writing / deleting / re-writing of files on the card I suspect there will be none to marginal improvement by de-fragmentation.
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