^ correct on files, problem is that defrag may help, but generally does not "fix" this problem.
If windows 7, It will stick the Hibernation file out in "left" field. This seriouly reduces how much you can shrink the drive. It is a Hidden file and can not be deleted unless Hibernation is disabled and write protect is removed.
You can try this:
Disable Hibernation: reboot and run Disk cleanup. then retry Windows shrink.
How to: http://support.microsoft.com/kb/920730
PS what I had to do with wife's "store" bought computer.