HOWTO: Sql2005 – Empty Transaction Log

Following those steps will first empty the transaction log and then shrink the file size

use master
go
dump transaction with no_log
go
use
go
DBCC SHRINKFILE (, 100) — where 100 is the size you may want to shrink it to in MB, change it to your needs
go
— then you can call to check that all went fine
dbcc checkdb()