1: Defragmenting is a waste of time more than 99% of the time, as it really offers no performance benefits and thus puts unnecessary stress on your hard drive
2: A good first target is any "loose" files you have, such as things you may have downloaded, documents, pictures, etc
I have an Acer Aspire5100 laptop with a dual hard drive. My C drive has only 6% free space and disk defragmenter says there must be at least 15% free space to run. My D drive has 60% free space but I don't know how to transfer (or what I can/should transfer) from one hard drive to the other.