Not sure how many people modify the size of the Windows Event Logs but it is something that I like to do simply because the default sizes of most them is just not enough. For example you may remember the default for your System and Application log files was a measly 512kb. That logged all of about a day of a really busy application server.
The problem with Server 2003 was the recommended maximum size for a log file was only around 300mb and the maximum total size for all Event Log files was around 400mb. You do the math and you can see that realistically you aren’t going be able to realize the benefits of having larger Event Log file sizes.
This has to do with Windows storing the logs in memory. As you can tell a 32bit system would run into some serious memory issues if you wanted to expand the size of several of these. Thankfully in Server 2008 this has changed. Microsoft has increased the recommended maximum size of a log file up to 4gb and all of them up to 16gb. Of course you will want to make sure you’re running the x64 flavor of Server 2008 to really see this advantage.
Take a look at the following knowledgebase from Microsoft for more info.