Grant forgot to mention that you can't take transaction backups in Simple recovery mode. So verify your recovery mode first. If it's already in Simple (EDIT: given your original post it might not be), you might be SOL because the trans log actually requires the amount of space it keeps ballooning to.

But if it's Full or Bulk-Logged, definitely check to see if you are taking transaction log backups. If you are, then again, the database might actually require the amount of space it keeps growing to and to try shrinking on a weekly basis is only going to choke the DB and cause other pain. Though limiting the transaction size will help some.