There doesn't appear to be a defrag facility.
As I understand I there is no need to defrag an Ext3 file system. Only reformat if you are having specific problems, and then only if the CF Telnet disk maintenance options have failed to resolve the issue (in which case the disk probably needs replacing anyway). As prpr says, if you back up your recordings, delete them from the internal disk, and then put them back, that will have the desired effect - but it isn't necessary.
I was only considering deleting files (recordings only) if formatting would destroy the custom firmware. But as the CF is held in Flash and its associated folders can be copied back from the ext USB HDD I will format the HDD without deleting anything.
If you used the remote to copy "everything" to USB, you
will not have copied the /mod folder (containing the custom packages), only the content under the /media folder. The internal disk has three volumes on it for various purposes, only part of one of which is used for storing recordings. The SUI only shows you a very limited view of it; the WebIF media browser shows you the whole structure (if you click the breadcrumb trail at the top of the page) but only media files within it; to see the whole thing you need Telnet or FTP (with the standard FTP server turned off and the
betaftp package installed, because the standard FTP again only shows you the /media folder).
If the /mod folder is missing when you access the IP address from a browser, the CF defaults back to installation mode and you will have to work out what selection of packages you need all over again.