For file defragmentation, I heard indeed that Diskeep does a good job been able to defrag files in use and base on a schedule, never use it though.

Regarding

"The defrag that comes with win2k3 is capable of defragging the files while sql server is online, it's a huge I/O hit and the server is pratically unusable; it's possible though."

I use it on one of our production servers and during the process it made the tempdb inaccessible. Even if I try to stop the process the SQL Server was inaccessible. I had to restart it.