It's important to know how prefetch works before messing with it, however your prior research should have given you some idea.
Prefetch files (.PF) are basically just reference files describing to prefetch what files/dll's etc. are loaded by a program when you run it. These are read by the prefetcher as the executable loads and placed into memory for the executable to access immediately, essentially doing 2 things at once.
The layout.ini file is used by some defrag programs (including Windows defrag) to place all those files referenced in the .PF files in one place on the drive making for faster access without the drive head jumping round having to look all over the place.
The .PF files are created and maintained by the prefetcher in conjunction with settings\control panel\administrative tools\services\task scheduler. If task scheduler is disabled they won't be created. Double click it for its properties.
After 13 minutes of computer idle time (and after 3 boots each time), "rundll.exe advapi32.dll,ProcessIdleTasks" is automagically called to read the .PF files and recreate the layout.ini file, then "defrag C: -b" is called to read layout.ini and place all the files referenced within it contiguously on the drive. Task scheduler needs to be running for this to work. Your drive will start rummaging around without apparent reason.
The older .PF files are deleted automatically by the system if there's more than 128 of them and the system generally looks after itself. All files in the prefetch folder can be deleted without any harm, however your boot and app launch times will suffer until the .PF files and layout.ini are rebuilt by the system eventually.
Memory and processors are WAY faster than any disk which is why prefetch works. You can remove all the files in the prefetch folder and disable task scheduler to test your boot and app launch times, but unless you have a blistering RAID drive I suspect you'll suffer, especially with large apps calling many files on launch, such as Word, Photoshop and many games. I've done extensive testing of the prefetcher on several systems and I'll never disable it, unless doing so improves performance.
One thing I found useful was to delete everything in the prefetch folder AFTER installing XPSP2 and upgrading to SP3, installing all my apps and cleaning up. I then boot several times, run all my apps a few times (it takes a few loads of an app for prefetch to get a good idea of what the app requires), allow an idle time for the system to create layout.ini from my boot .PF and application .PF files (or call rundll advapi etc. manually).
I then run Perfectdisk, clean the whole thing up and disable task scheduler. Because NTOSBOOT-B00DFAAD.pf is a reference list of all the files required during boot, allowing the system to recreate this after a cleanup and several boots reduces the filesize to almost half and removes unnecessary references. The system should eventually do this cleanup but it may take some time, this is just a quicker way.
I disable task scheduler while installing and experimenting with new apps to avoid having them being referenced. It just keeps it a bit tidier. Once I'm happy to keep the app, I enable task sheduler (and start it), run the app a few times to allow its .PF creation, go to start\run and type "rundll.exe advapi32.dll,ProcessIdleTasks" (no quotes and case-sensitive) to allow the layout.ini file to be updated.
I also disable task scheduler so that "defrag C: -b" isn't called so that Perfectdisk's excellent defrag isn't meddled with, which places all the boot files at the start of the disk, but "defrag C: -b" doesn't.
There are registry hacks and values all over the net to enable/disable some functions to experiment with but there's one sure way to speed up your system - get a faster drive.