Auto Shrink and Truncate Log on Checkpoint are not the same thing. Auto Shrink reduces the physical size of the database files, including the tlog file. Truncate Log on Checkpoint removes the inactive portion of the tlog - transactions that have been terminated - whenever a checkpoint occurs on the database. This option does not affect the physical file size.

There's a topic in the SQL Server 2000 BOL that you might want to also look at. Do a search for Shrinking the Transaction Log

-Mike