Active Directory in Windows 2000 is Microsoft's way of providing effective control over files on the network. The heart of Active Directory is the Extensible Storage Engine and the associated Active Directory database. Like most heavily used data structures, the Active Directory database becomes fragmented as items are added and deleted, and must be defragmented. Active Directory exacerbates this need because Microsoft designed the Extensible Storage Engine for speed, rather than storage efficiency.
Although Windows 2000 performs an automatic, online, defragmentation of the Active Directory database following garbage collection, the defragmentation is incomplete. In effect, online defragmentation only rearranges the pages in the database, which makes access more efficient, but it does not reclaim space for the file system. To perform a complete defragmentation, the computer must be put in Directory Services Repair mode, which means it is running as a member server.
Since putting the computer in Directory Services Repair mode requires restarting the computer and selecting the appropriate mode from the boot menu, it is best only to do an offline defragmentation when you are reasonably sure that a significant amount of space can be reclaimed. This typically happens when the database contents have gotten significantly smaller due to administrative actions or for other reasons.
Microsoft describes the process in this Knowledge Base article.
Rick Cook has been writing about mass storage since the days when the term meant an 80K floppy disk. The computers he learned on used ferrite cores and magnetic drums. For the last twenty years he has been a freelance writer specializing in storage and other computer issues.