Open Event Viewer by typing in eventvwr into the Start Run and box, or you can select it under Administrative tools section of Control Panel of your system.
You'll notice over on the right-hand side of the window that the current size of my Application and System Event Logs are 512 KB.
Now you can right-click on one of the Event Logs.and choose Properties from the menu.
In this dialog you can do a number of things… you could clear the log, increase the size, or just set the system to overwrite events as needed.
I chose to increase the maximum size of the event log, and then also to overwrite events as needed.
In windows vista , you'll notice that the default settings in Vista are to overwrite as needed, and the maximum size is way bigger.