The supplied defrag may not defrag under all conditions. Sometimes you need to free up 1/2 the drive, othertimes you have some readonly/system files that are in use and will not be moved.
Replace it, try safe mode, but it's clear to me that it's just limited, not broken.
I HAVE TRIED DEFRAGGING MY PC AND EACH TIME I RUN IT, IT SEEMS TO RUN OVER AND OVER WITHOUT COMPLETING. PLEASE ADVISE ON WHAT THE PROBLEM IS...