There are no defragment utilities for CD-RW. Although theoretically fragmentation will occur after frequent deleting and rewriting of files, this is usually not a problem.
Some packet writing programs like Roxio’s Direct CD keep a record of used sectors in the overhead format of the disc. This is one of the reasons for the relatively high overhead of a formatted CD-RW disc. This technology is called sparing and prevents the same sector(s) from being written again and again if files are deleted. This is done to prevent premature disc failure due to repeated writes to the same sector(s). This feature may help to prevent fragmentation because unused sectors are written first instead of writing again to sectors freed by file deletions. Because of sparing, Direct CD writing is not done the same way as a hard drive, which writes to any available space (causing fragmentation).
I don’t know if sparing technology is used with InCD, as I have no knowledge of Nero releasing any useful information about InCD.