I do this fairly frequently. Once a month or so. There are a few things I do first to make sure I don't waste time defragging unnecessary files.

1. First is to delete the Internet Explorer Temporary Files and History.

2. Second is to delete TMP and BAK files.

3. Third is delete any files and directories in the \TEMP and \WINDOWS\TEMP directories

4. Windows98 has a built-in utility called Disk Cleanup. You can run it from either the Start / Programs / Accessories / System Tools / Disk Cleanup or directly run CLEANMGR.EXE

5. Lastly if u are using windows me or xp go to start>programs>accessories>system tools>disk defragmenter.
6. this wont be of any use if u dont have a minimum 15 of free space in each and every drive or atleast in teh rive that u wanna defrag