Create a new Registry import file named context_defrag.inf in Notepad (be sure to save with it with the Save as type set to All Files and not Text Documents) and place the following text inside:
; context_defrag.INF
; Adds Defrag to the right click context menu in Windows XP
[version]
signature="$CHICAGO$"
[DefaultInstall]
AddReg=AddMe
[AddMe]
HKCR,"Drive\Shell\Defrag\command",,,"DEFRAG.EXE %1"
Then, right-click and choose Install. This will add a context menu to XP that allows you to automatically defrag drives, using the command line version of the built-in defragmentation utility. To use it, navigate to a drive in My Computer, right-click, and choose Defrag. A command line window will appear, and that drive will be defragged. When it's complete, the window just disappears.
UPDATE: To remove this functionality, Open regedit.exe and navigate to the following location:
HKEY_CLASSES_ROOT\Drive\shell\
Then delete the Defrag folder and close Regedit