Disk Defragmenter does not work

I have tried to run Disk Defragmenter on my computer several times (Windows XP Professional, 512 RAM, 120gb hd), but it always seems to freeze at “compress old files” after the utility starts. I have tried using it in safe mode and have tried doing a cold boot, but it always seems to give me the same problem. I have also tried to wait for over 25 minutes, but it still does not progress from 4 progress bars and “compress old files”. Also, I have not compressed my hard drive. And, Scandisk runs just fine. Can anyone help me with this?

Thanks you