The operating systems Windows 8, Windows 7, Windows Vista, Windows XP64, Windows Server 2003, 2008 and 2012 offer users the ability to create "Shadow Copies" for protecting their data. This new feature automatically creates copies of files currently in use at regular time intervals. Since Windows only captures changes in the files, additional space is normally not needed. Accidentally deleted files and folders or previous versions of documents can be easily restored using a convenient command accessible through the right-click menu. Simply right-click the object you want to restore and click "Restore Previous Versions".
At the moment of installation, Windows Vista, Windows 7 and Windows 8 the shadow copy mechanism is set by default. With Windows XP64 and Windows Server 2003/2008/2012 systems it is disabled by default.
Dur"Conflicts with shadow copies during defragmentation"ing defragmentation, files on a volume get moved. Windows classifies these operations as a deletion and therefore creates a complete new shadow copy of the moved file. Since a lot of files are moved during a defragmentation, a lot of new entries are created in the shadow copies and they take up more space on your data volume than before the defragmentation. This behavior may overwrite older shadow copies with newer ones. Unfortunately, this can also lead to the deletion of the system recovery points! These consequences are most frequent when using the COMPLETE method.
Shadow copies are filed in the folder “System Volume Information” and cannot be defragmented. This can end up having a negative influence on the results of the defragmentation. There is, on the other hand, almost hardly any loss in performance caused by fragmented shadow copies. Although these files will be displayed as fragmented, they still have only a minimal influence on the operating speed of your system.
You could disable the shadow copies to achieve improved defragmentation results but you would then wind up losing the operating system’s built-in backup functionality. That’s why we recommend your leaving the shadow copies enabled.
Microsoft is already aware of this problem, as this issue also occurs in the Windows native defragmentation software. More details may be found in this article from Microsoft: http://support.microsoft.com/default.aspx?kbid=312067
In Windows XP64 and Windows 2003 Server, this problem will not occur as long as storage volumes have been formatted with a cluster size of 16KB or larger.
Notes concerning the default enabled automatic optimization:
Please bear in mind that under Windows 8, 7, Vista, Windows 2003 Server, Windows Server 2008 and Windows Server 2012 a complete defragmentation of drives that are imaged by shadow copies may lead to losses of old image sets. This is a problem known to Microsoft, and these drives are marked accordingly in the O&O Defrag user interface. We therefore recommend running an OPTIMIZE/Complete-defragmentation on large installations only and otherwise leaving automatic optimization of O&O Defrag enabled.