If the error is that you're out of space in the transaction log you can truncate the log using:

DUMP TRANSACTION databasename WITH NO_LOG -- SQL 6.5/7.0

Or

BACKUP TRANSACTION databasename WITH NO_LOG -- SQL 7.0 Only

If no space is being freed, check to see if there's an open transaction:

DBCC OPENTRAN(databasename)

You will not be able to truncate the log past an open transaction.

HTH

-Mike