I cannot remember if there was an option to shrink files via EM in SQL 7 as I always did it via QA. If there is is I would think its right click the databases then under tasks.

The result you received from dbcc shrinkfile is the result you will always get. If the file did not shrink it is because the last virtual log file is used (see BOL for info on this)

to see it it is used run dbcc loginfo(dbname), a value of 2 in the status field means the virtual log is used, so check to see the value in the last row returned.

You will need to cycle this out, best way is to backup the log, sometimes just running the shrink twice does it.

the shrinkfile command should look like this

dbcc shrinkfile(logicallogfilename,size) where size is in MB

All the above is for info only. If you are ok on disk space don't bother to shrink the log file. If this is a one off shrink because its blown up after a one off job, just shrink it to a size it will need to be to support normal functionality.