It is not what it holds but whether or not there is a corrupt file in the
folder.  Here is part of my standard blurb, check out #5:

TROUBLESHOOTING PROBLEMS WITH DISK DEFRAGMENTER

1.  Apply one recommendation at a time and then try Defrag again to see if
it helped.

2.  Disable the screensaver, anti virus program and the cable/DSL modem, if
any.

3.  Delete the files in the Recycle Bin, the browser cache (Temporary
Internet Files folder if using MSIE) and the Temp, History and Recent
folders.  Corrupt files can cause Defrag problems.

4.  You may receive a notice indicating the drive was written to and caused
Defrag to restart. This means some process is causing hard drive activity
which interferes with Defrag.  Either reboot to safe mode and run Defrag
from there or use EndItAll2, a free program which shuts down nearly all
running programs except Explorer and Systray.  Download the program from
here:  http://www.docsdownloads.com/Tier1/enditall.htm To boot to safe mode
in W98, see:  http://support.microsoft.com/support/kb/articles/q180/9/02.asp

5.  It's possible corrupt files in the Cookies and Applog folders will cause
Defrag problems.  Since those files contain useful information, you can
either move them to a partition other than the one being Defragged or to
floppy disks.  Once Defrag is complete, you can replace the files.  If it
appears either folder contains corrupt files, you will either have to try to
determine which files are corrupt, delete all the files and let them rebuild
as part of your normal operations or move the folders during the next Defrag
session. If you run into problems deleting a file because it is corrupt, try
deleting it from a DOS prompt.

6.  The first Defrag after installing or upgrading to Win98 may take a
significant amount of time to complete.  Also, Defrag may appear to stall
out at the 10% mark; however, this is a common occurrence.  As long as there
is disk activity, let Defrag run.  The appearance of stalling with W95 may
also occur but it will generally be before 10%.

In addition to what Ron explained about APPLOG and Defrag in general, you
might want to peruse my Clean Boot article, first link in my sig.

The Applog folder keeps a record of the programs you use. It's for
Defrag if "arrange programs so they start faster" in the settings
for Defrag is selected. The setting slows down Defrag considerably
and I've never noticed any appreciable benefit from the setting.

Try turning off the Defrag setting. Also try Scandisk from the
command prompt only from the Dos Boot Menu.

Regards,

Bill Watt  
Win98 Computer Help & Other Information  http://home.ptd.net/~bwatt/