Good defraggers have at least 2 major tasks:
1) make all files contigouos
2) make all free space one big contigouos chunk.
Windows built-in does only task 1, which is OK for speeding up everyday jobs, but only barely usefull for DVD burning, as it leaves the free space all over the partition, so a big VOB or ISO files are not contigous.
Many years ago I was using Norton Speeddisk, you had options to defrag files, also pack all files at the beginning or end of the partition, and anotehr nice task, reorder the files list in the directory!
Anyone knows freeware that does the same as Speeddisk?
EDIT: Also, Speeddisk knew how to defrag the system files, like swap and registry.
Anyway, my opinion is that defragger should run manually on quiet system and never in background. The damage here due to I/O error or other error is just too great to risk.