Given that defrag physically moves files on the hard drive, I would say definately not. Not unless you want to risk corrupting your SQL Server install. I usually run Defrag with all else closed to avoid file corruption.
Now, if SQL Server is on a different logical or physical drive than the drive you are using defrag on, then it might be possible. Definately possible if on a different physical drive, not really sure about a different logical drive if the physical drive is the same.
Still, better safe than sorry, I say. And make sure you backup SQL Server and your data files before you do the defrag from a CYA point of view.
Catadmin - MCDBA, MCSA
"Just because I'm paranoid doesn't mean the universe *isn't* out to get me!"