The problem
NSMAdmin fails with "The event log file is full"
The event log error is followed by
Application has generated an exception that could not be handled.
process id= Thread id= The specific process and thread is different every

I have just re-installed NSM 2.0 on a NW6.5 sp5 server in a test tree.
I did a vanilla install, updated schema, created proxy accounts etc.
W/S is Win XP sp2 with BETA Novell Client 4.91 SP4 for Windows 20070126

There are no logs present as no jobs have been setup
sys:factory\auditlog is empty
SYS:FACTORY\Logs\none.txt 0 kb 13/3/2003

From DumpConfig
Engine Version: 2.00.08 Oct 31 2006 10:45:20
Engine OS Build Version: Novell NetWare 5.70.5
Complete Extended Character Set API available: No

Removed and re-installed .Net 1.1 and SP1 from NDP1.1sp1-kb867460-x86.exe
taken from Microsoft site.
tested installation by running