Until you perform a backup of the database log file, SQL Server will keep the log file around so that it could perform a point in time recovery if you asked for it.
Are you taking log backups?
The company I work for makes a backup product called SQL Backup Pro that provides a decent GUI for taking backups (amongst other things), it might be useful, even if you just use the trial version to get a log backup done.
Once you have taken a log backup, you can shrink the log file on disk from SSMS:
- Right click on the database
- Choose Tasks -> Shrink -> Files
- Select the Log File type
It relates to SQL Server 2000, but this description of the process by Microsoft is quite good.