Hi,

Yes, the log backup will only free up the space so it can be reused, so you won't see the size of the file decrease. If you want to know how much space is actually used inside the file try DBCC SQLPERF (LOGSPACE). That will give you the size of the log file in MB and the percentage actually used. From that you can work out how much free space there is. Monitor that for a while and you should be able to calculate a suitable log size and backup frequency.

Cheers,

Cath