Yes, it should be okay to use the PC while defragging. One thing to note is whether the defrag program is efficient...it should recognize resource usage and back off, otherwise applications may stutter, and also some of the files may not get defragged.
I've played Fallout3 with Diskeeper 2009 going full blast on another drive in the background. Not a single problem! DK's algorithms are awesome and use only few resources...I always leave Diskeeper in autodefrag mode regardless of what I am doing on the system.