Periodic reindexing will recover space (especially if you update the base table frequently). Updates force the index to create new leaf blocks, and the old ones just don't get recycled or deleted.

I've realized significant performance increases by rebuilding indexes. However, it's not something you want to do weekly. We do it once a year or as needed .. that seems to be enough.

Analyzing your table will provide more accurate statistics for the cost based optimizer.

-Ken