losing crucial disk space

i have a 320G western digital that actually reads as 283G available using 260G of it. Less than 24G of free space running win7 sp1 and all of my associated programs. already moved the little bit of jpg's wmv's mp3's. The 65% fragmentation upon analysis with defragler is in the win7 file system, in other words the read-only files. Upon completion of defrag, I'm still at 47%. Program files show up in blue squares, win sys files in Dark red. ANY way at all to defrag those??? Can i use my external drive to boost defraglers performance in any other way??? i was formerly using 3gb ram then upgraded to 6. don't notice the ram difference unless i'm converting file formats. it's pointless to me to use defragler if i cant defrag the winsys files. the advantages to piriform's defragler over windows defragger is the fact that you see what file is currently working and what's where on the drive. if i cant defrag win7 files then why use a third-party product at all. The windows product works fine. Besides a third-party product will only use crucial disk space.

Here's what i run....

Dell Inspiron M5030 Laptop

Samsung 6G ram, slot 1= 4G slot 2 @ 2G

AMD Athlon 2 P360

ATI Mobility Radeon HD4250

sound card integrated into motherboard: Realtek HD audio drivers

windows 7 home premim 64bit SP1

Have you tried running a boot time defrag?

Boot-Time Defrag – defrags the system disk during the boot time, before the whole operating system is loaded. This allows Defraggler to defrag the files which are blocked after the operating system is loaded.

http://www.piriform.com/docs/defraggler/technical-information/boot-time-defrag

- Use Defraggler to move A LOT OF (non system) files you don't regularly use/open towards the end of the drive. That way you'll make room at the beginning of the drive for systemfiles (e.g. the pagefile) to be defragmented.