If you read the Microsoft article “XADM: How Circular Logging Affects the Use of Transaction Logs” (http://support.microsoft.com/?kbid=147524) carefully, you’ll see that circular logging is working just fine. When it’s enabled, Exchange can reuse log files instead of creating new ones. Under typical circumstances, Exchange will create no more than five logs when you enable circular logging; however, Exchange will create additional log files, if needed, during surge conditions of high activity–such as when you run LoadSim to create a bunch of sessions and messages. After Exchange creates those log files, Exchange won’t delete them until you purge the files by doing a full backup with an Exchange-aware backup utility. Exchange will reuse the first log files, but they’ll stay in place across reboots until you purge them.