one of the problems is that after formatiing a 60GB hard drive on a PS3, you'll end up only being able to use about 55GB, thats just the way the cookie crumbles i'm afraid (as you've already said).
As for your games, you can delete the install files from your HDD by going into the Game Data folder and selecting delete for the individual games you'd like to remove.
You won't lose any saved games but you'll probably have to download all the patches again.
Or, you can do what I (and others) have done: back up your PS3, swap out the HDD for a larger one, and then let the PS3 format the drive then restore your stuff from the backup
As for defragging, not really necessary.
You can also try clear your browser cache if you use it often too...
Proud Sony Rear Admiral
