According to VMware KB 1006810:
http://kb.vmware.com/kb/1006810
VMFS datastore can't be defragmented, nor do they *need* to be defragmented due to the large VMFS block size, the large size of VMDK files, the amount of cache on SAN arrays (where VMDK files are typically located), and due to the non-sequential nature of I/O with multiple VMs, on different hosts, all sending their data to the same array. Whatever problems you're having aren't due to "VMFS fragmentation."