In SharePoint 2007 you can customize where your ULS logs are saved on the file system of your WFEs. Some people like to keep their C drives clean so they move the ULS logs to another location. You can do that through Central Admin > Operations.
Clicking Diagnostic logging takes you to this screen, where you put the path in:
Click OK and your logs are moved. Pretty cool, huh? Well, there is a gotcha. Since you configure that in the Operations tab it applies to all of the servers in your farm. Every single one. The Logs directory on all of your servers will be the same, whether they need it or not. Another part of this gotcha is that if a server doesn't have the directory (like no D drive in the example above) the Logs just vanish. So if you choose to move your ULS log folder, make sure the path exists on all of your servers.