i have no idea sorry. does defrag actually go through the whole process of fragmenting the hard drive and reporting the data to be contiguous afterwards? can you tell us what make and model of laptop do you have aswell please?
something to try maybe, i am guessing here.
try running a a full hard drive error check with chkdsk. click on 'start/my computer' then right click on your hard drive and then select'properties/error checking' then tick both boxes here and restart the computer, does chkdsk report any errors and fix them?.
next even if you get errors reported with chkdsk try running a defrag and analyse it afterwards. if defrag runs as normal but again after analysing it says it needs to be run again then try starting the computer up in safe mode maybe and run defrag and then re-analyse the drive again afterwards? does it still say that defrag needs to run?
if defrag works in safe mode after you run chkdsk it could just be some programs you have running in the background stopping defrag from running properly. if the drive still shows as needing to be defragged after running defrag in safe mode then try running an online hard disk health check maybe click here it works with non seagate drives too.
if seatools reports bad news dont panic but do back up or image all your data if you haven't already done so and then download and run a second opinion with something like powermax click here
if powermax also confirms your disk health to be dodgy then really do save your important documents etc. and buy a new hard drive drive soon.
if both seatools and powermax say your disk health is fine then i really do have no idea but have you visited windows update after re-installing windows xp and installed xp service pack 2 and all the other critical updates again?
check your laptop manufacturers website for the latest drivers for the hardware that you can download too.. check device manager in xp 'control panel/system' is there any question marks or exclamation marks showing beside any devices listed here?
have you updated and run your antivirus software and also run a check for spyware with adaware or spybot search and destroy etc.lately?
its all i can think off sorry.