I've been having this problem with Defraggler for a while. Whenever I run Defraggler, the analysis says that my hard drives are as fragmented (if not more) after it does its thing. I just did a Quick Defrag to check, and my fragmentation was at 37% both before and after. When I ran a full defrag last night it did the same thing.
I'm running Windows Vista Home Premium SP2 on a custom-built machine. If you need any other specs, let me know.
Like redhawk said it's probably System Volume Information but I wouldn't purge System Restore points because you may need them later on, unless you're creating backups with ERUNT or something similar. As it's a custom-built machine (I'm assuming it's high end) the fragmentation caused by SVI won't really affect your hard drive.
Good to know; there are eight large files in System Volume Information on the list. My paging file is there, as well. I didn't know Defraggler couldn't access those files.
It's not really a high-end machine, although it still runs as good today as it did back when I built it a year and a half ago; I'm not trying to defrag for performance issues as much as for preventative maintenance.