Optimizing Transaction Log Performance

General recommendations for creating transaction log files include:

Create the transaction log on a physically separate disk or RAID (redundant array of independent disks) device. The transaction log file is written serially; therefore, using a separate, dedicated disk allows the disk heads to stay in place for the next write operation.
Set the original size of the transaction log file to a reasonable size to prevent the file from automatically expanding as more transaction log space is needed. As the transaction log expands, a new virtual log file is created, and write operations to the transaction log wait while the transaction log is expanded. If the transaction log expands too frequently, performance can be affected.
Set the file growth increment percentage to a reasonable size to prevent the file from growing by too small a value. If the file growth is too small compared to the number of log records being written to the transaction log, then the transaction log may need to expand constantly, affecting performance.
Manually shrink the transaction log files rather than allowing Microsoft® SQL Server™ 2000 to shrink the files automatically. Shrinking the transaction log can affect performance on a busy system due to the movement and locking of data pages.