Wouldn't all spyware apps be disabled when Windows is loaded in Safe Mode?
No. Many spyware apps run as a service in safe mode, although most of the simpler ones won't load in safe mode. Also most of the nastier stuff hides it's process. Just because all your processes look okay does NOT mean spyware is not running.
At the very least run Microsoft Anti-Spyware and Trojan Hunter in Safe Mode to be sure. I would also recommend a full virus scan in safe mode.
Go through all your startups carefully. Some legit background apps can interfere with a defrag. Any app in your startups you have doubts about, do a google search on the file name to find out what it is.
Hope this helps...