Whenever an application crashes, Windows gathers any data related to the crash and stores them as part of the report files, and this can include chunks of memory (both RAM and the Paging File), as well as related files on the hard-drive. Naturally, standard errors and messages from applications will also generate log files which may include additional data.
Generally speaking, if you encounter a lot of crashes, then yes, you will need to clear out the log file "cache" every once in a while.
Fun (but slightly unrelated) fact; every time you make a change to the Windows Registry, a temporary "receipt" is kept in a folder under the Windows directory to verify that a "transaction" occurred. These files are commonly wiped whenever you log out or shut down the system. If you keep your system active for a particularly long time and run certain programs (like NVIDIA's 3D stuff) which actively modify the registry constantly, than you can easily run these receipts up to 500GBs of hard-drive space.