The article http://support.microsoft.com/?id=222469 applies to this issue as well. Try the SAFE MODE as a simple safe workaround first.
Bob
I have Windows ME and have been unable to defrag. My son, who works with computers all the time, said that this particular windows version has had problems with it. Unfortunately we did not have time to discuss resolving the problem. Is there a way around this without having to purchase a whole new system?

Chowhound
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