Not familiar with that particular engine but one possibility is that it contains the log of current transactions, i.e. WORK that's STARTed but not yet COMMITted or ROLLed BACK.
Pretty much spot on. Depending on your database recovery model, it either contains the data for uncommitted transactions, or a log of everything that has been done in the database since the last full backup (enabling a restore to any point in time since then, and fancy things like database mirroring / log shipping).
The former should mean small(ish) log files, which usually contain a fair amount of empty space, corresponding to the largest transaction in the file's history. That space can be freed up by using the database commands to shrink the file.
The latter means big log files, especially if you're not regularly backing up the database.
On a modern file system, the log file will be locked while the database is online, safe from errant presses of the Delete key in file explorer. I'm guessing that on Win2000, not so much...
Biting the hand that feeds IT
