Disk Cleanup just deletes temporary files, Windows log files and etc, where Defragmenter moves the files physically on the hard drive to make them faster to access.
And if you only have a few hundred KB of free space then no wonder you are in slow-mo.
Your hard drive has allocated space for the Virtual Memory(A backup for your Physical RAM), as well as allocated space by other programs and Windows itself for necessary operations.
I had more than a few hundred KB, and once I switched from the CA (Computer Associates) antivirus, etc. that Road Runner provides to Microsoft Security Essentials it's been like night and day - my computer has the speeds I expect from it.
So, if Disk Cleanup, isn't a defragger, how do I defrag?