How does one prevent tablespace fragmentation?

Always set PCTINCREASE to 0 or 100. Bizarre values for PCTINCREASE will contribute to fragmentation. For example if you set PCTINCREASE to 1 you will see that your extents are going to have weird and wacky sizes:
100K, 100K, 101K, 102K, etc. Such extents of bizarre size are rarely re-used in their entirety. PCTINCREASE of 0 or 100 gives you nice round extent sizes that can easily be reused. Eg. 100K, 100K, 200K, 400K, etc.

As per my Openion :

Use the same extent size for all the segments in a given tablespace. Locally Managed tablespaces (available from 8i onwards) with uniform extent sizes virtually eliminates any tablespace fragmentation. Note that the number of extents per segment does not cause any performance issue anymore, unless they run into thousands and thousands where additional I/O may be required to fetch the additional blocks where extent maps of the segment are stored.