The only decent defragmenter that I've found for Windows 2K is Norton SpeedDisk. Unfortunately, it's not free, and they insist on bundling it with the waste of space that is the rest of Norton Utilities.

You can try Diskeeper, which, again, is not free, but they do offer a trial period. It wasn't as good as SpeedDisk when I last tried it, but it's apparently a load better these days.

As for the defrag/disk space thing, Win2K defrag sucks. If the disk is more than 70% full, you need to run it loads of times before it starts to bite. Once it's got stuff basically sorted, it's quicker (and better) as long as you run it regularly.

WinXP's defrag seems to be a lot better.