Carie,

Interesting. The BOL states that the status column returned by DBCC SQLPERF(LOGSPACE) will always return 0.

It's king of confusing (if I remember this correctly) but the log may look full but might not be. The log file is broken into multiple virtual log files. You can see this if you issue DBCC LOGINFO(pubs). My pubs database shows four virtual log files. Here, a two (2) in the status column indicates that the virtual log file contains part of the active transaction log. I'm wondering if your active virtual log is the one on the end.

You should be able to see SQL Server use the virtual log files by issuing some dummy UPDATEs:

UPDATE authors SET au_lname = au_lname

-Mike