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What exactly is "INDEXing" a drive?

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Charles Bundy

The content of your hard drive changes, thus the index needs to be updated periodically. During this search and update your hard drive access will slow down (because it's doing a lot of read/writes) thus causing your system to be sluggish.

Indexing would not be the cause of your desktop items being gone, but there is a wizard called 'Desktop Cleanup' that might be the culprit.