You shouldn't need to go anywhere near the Control Panel. You should be able to access the defragmentation program from the programs list.
In Windows ME, it's Start > Programs > Accessories > System Tools > Disk Defragmenter.
It will be somewhere fairly similar in XP. If you can't find it, just go to Start > Help and type in 'defragment'.
NB: The defragmentation program restarts if any other program writes something to your hard drive while it's running. It's important to close all other programs down before running it. This includes some that run 'in the background'. You can't close these programs simply by clicking on a 'close' button because there isn't one. Before defragging, you should press Ctrl-Alt-Delete and close down each unnecessary program in turn. (If you've got XP, you have to go into the Task Manager after pressing Ctrl-Alt-Delete). Close down everything except Explorer and SysTray.
Chris