In the context of drive defragmentation, allocated space
is the portion of the drive being used to hold files. Unallocated space
is the remaining drive capacity that is currently "free", still available to store further files. If the defragmenter reports that it is currently defragmenting allocated drive space, it is defragmenting the contents of files.
Defragmenting involves several processes, the defragmenting of files or allocated space is the one that most people think of as "defrag". I'm not familiar with the specific defragmenter to know how fast it is, or what specific strategies it defaults to. But if the drive is close to full, ie there is not much free space on it, any defragmenter can run very slowly and take many hours to complete. It is also possible that the drive is not in good shape - older Quantum drives have some reliability questions in my experience.
I don't quite understand what you mean about the "new company name Western Digital" and using their zero fill program. Quantum drives are supported by Seagate - if you tried a Western Digital utility that could explain why it didn't do anything. If you'd successfully used a zero fill utility, the drive would be completely blank.
"If this is a Seagate or Maxtor (or Quantum) ATA or SATA drive, please download the SeaTools for DOS diagnostic to test it. If the drive is failing, the tests in SeaTools for DOS will indicate as such."
So if you'd like to do a diagnostic on the drive to see if it's health is failing, you can download the correct tools here:http://www.seagate.com/www/en-us/support/downloads/seatools