Defrag on SQL.70

We are currently running SQL 7.0 on HP LH4.
The Database resides on Raid 0+1 HP Raid controller which consists of 6 18gig 10,000RPM Drives. We have about 25 gig of available space. We are running Diskeeper 4.0 running every two hours which reports that the partition is about 88%
fragmentent. I have scheduled a defrag while the SQL database was down and it didn’t make any improvemants. Also ran the directory consolidation. In addition I installed Norton’s Speed Disk which didn’t do anything.
Does anyone else have this kind of problem?
What can we do?

Any comments will be greatly appriciated!