Defragmentation and 15% minimum space with Windows XP
Use MyDefrag (new version of Jkdefrag)
MyDefrag does not require a minimum free disk space, but:
Windows reserves some space on NTFS disks for expansion of the MFT, default is 12.5% of the volume size. This space is counted by Windows as free space because it can/will be used for regular files when the rest of the volume is full. MyDefrag cannot move files into this space, only out of (see ReclaimNtfsReservedAreas).
On very full harddisks MyDefrag will take more time to shuffle files around, and in some cases will have to throw the towel in the ring and leave some files fragmented or not optimized. A file can only be defragmented if there is a gap on disk big enough to hold the entire file, depending on the script that you have chosen. There may be plenty of free space, but what is needed is a single big gap.
There needs to be some free space so that the defragmenter can copy files from their current location either directly to a new location or via a temporary location so that they end up contiguous.
I don't know where the 15% figure comes from, but I'm guessing that it was settled upon after testing and analysis as it will cope with most situations.
According to their site, PerfectDisk 10 will defragment with 1% free. I've used PerfectDisk and it an excellent piece of software. Very powerful.
Diskeeper will work with less than the 15% and can be set to do much more than the MS tool. Check out their info at diskeeper.com.
I have found it has little imapct on system performance even when running all the time to eliminate fragmentation. We run it on a number of servers and it has helped a gret deal.