I've just read Douglas Schweitzer's piece about logs, and the related pieces.

Keeping logs is not as difficult as it seems, but some companies have an interesting approach. I keep logs of everything - I've mentioned before some of the steps I take to keep a record of the IT stuff I do, like using WordPress to store information, particularly changes.

Logs I process on a weekly basis, and I extract the information from them that I feel is valuable (for example, I have records going back years of the emails going to and from the internal network. These are retain indefinitely (they are in a DB so I can search and report on them.