Hutch Systems Service : Knowledge base article #131
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SQL Server Log Truncation
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http://support.microsoft.com/?kbid=873235

Excerpt:

To recover from a situation where the transaction logs grow to an
unacceptable limit, you must reduce the size of the transaction logs. To do this, you must truncate the inactive transactions in your transaction log and shrink the transaction log file.

1) BACKUP LOG dbname WITH TRUNCATE_ONLY
2) DBCC SHRINKFILE filename, targetsize (MB)
OR
DBCC SHRINKDATABASE (dbname,freespacepercent[optional]) to shrink both the data file and the log file.
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