RadioFan welcome to SevenForums.
I have no earthly idea what smart defrag is but I do know that the win 7 defrag works fine. The only down side to it is that is no graphical presentation, but what counts is how well it defrags and how well it plays with other win 7 software.
My opinion: Get rid of that 3rd party defragger and use the built-in defragger.