On my Small Business Server 2000 machine today when running defrag, although there is 31% (2.5GB out of 8GB) space free on this partition (C: System partition), defragging made no difference whatsoever to the fragmentation of the drive which is currently very high.
The Defrag Graphical display is also full i.e. indication no free space, although clearly 1/3 of the drive is empty. have tried disk checker etc, and rebooted several times.
It is a SCSI RAID 5 set of disks. C: is an 8GB partition and the D: is 20 GB.