The problem is almost always that there is too much running on your system for the program to perform its function.

The Defrag program (to open: My Computer / right click on your hard disk / Properties / Tools) will restart every time a file is changed, so if you have programs running at the same time that e.g. write log files, then the program will eternally restart (A similar thing can happen to the the disk Error Checking program when in Thorough mode on prior versions of Windows).

Yes, you do need to run the program, or your hard disk will become hopelessly fragmented, i.e. files will be on the disk in many, many pieces, so every time you open a file your system has to find all those pieces and put them together for you before it can even display the file.

To get the program to complete you need to reduce what is running on your system when you run Defrag.  Do that by exiting any programs you do not absolutely need.  Get off the internet for one and close or temporarily disable your AntiVirus program.  Shutdown any Real Audio, Messenger programs, MS Works, CD/DVD monitors, etc.   Check your taskbar for icons and right click on them to see if they have Exit or Disable options.

Then try Defrag and see if it can complete.   Here is an example of a completed Defrag on a housecleaned disk:


If that does not work then you need to run Defrag before all those programs startup in the first place.   To do that you need to Shutdown your system with the Restart option.  After the screen comes alive on the boot hold down the F8 key.  This will put you into what is known as the Safe Mode Startup Option Menu.
From here you want to take the Safe Mode with Command Prompt Option.  When you get the command (DOS) prompt enter the following commands:

> cd C:\Windows\system32  (where C is the letter of your hard disk)
> Defrag C: -a -v            (where C is the letter of your hard disk)
Let the program run and then it will display results.
Hold down the Ctrl and ALt keys then hit the Delete.
Your will get the Windows Task Manager window.
Click the Shutdown tab at the top
Select Restart.    System will reboot.