I had Window ME for four years and found it to be an underpowered system with too many additions such as System Restore.
The problems with ME were never addressed and it is the one operating system which should never have come onto the market.
MS began to realise that the '98 / ME operating system was totally inadequate and they should only have maintained a Professional approach for Professional users and should not have succumbed to the crap sellers vision of cheap goods and cheap tricks.
The best advice is to either strip ME down to work like Windows '98 or change to Windows XP. Take the compatability test to see if your hardware will run XP Home.
As to ScanDisk, how old is the drive? They are prone to failure at about the four year mark. Run the drive manufacturer's drive diagnostic diskette to see if there are any errors and use Diskeeper Lite instead of the ME defrag. If it still won't run try using Delindex.bat to clear out old index.dat files and other junk files which can cause a stoppage.
With your ME bootdisk, if you put delindex.bat on to it you can simply run: A:\>delindex run , press Enter, and watch all the junk come off the drive.
The second time you run you will notice that there is not the same accumulation of junk files.
Again, using your ME bootdisk, run:
A:\>scandisk /all /surface , to see if there is a problem from scandisk's viewpoint.
A:\>scanreg /fix /opt , will optimise the registry and help to speed up the boot time.
A:\>scanreg /restore , you probably know about for restoring a previous registry.
If you disable System Restore completely, it is better to do a clean install to a properly partitioned drive and then make a drive image.
ScanDefrag 5.0 will run CleanManager, ScanDisk and Defrag automatically on re-boot when Windows is not loaded.
All in all, my experience of Windows ME was a bad one. By making it work like '98 I finally got it to perform properly. By changing to XP (Pro in my case, as it was all I could find in this locale) and adding more RAM (originally 256 MB) I found that I could get a LOT more performance from this lowly 1·0GHz PIII than was ever possible when using ME.
If you need the computer for work or study XP is the way to go. If it is only for play then better join the Army, take a GOOD look around you, move to higher ground and learn the art of survival.