However, the tool configures your server to log all the stuff it's processing. This is because the registry value of TraceCategories is set to "*:Verbose". Set the registry value to "*:Error" if you only want the errors to be logged. If you want to log errors and warnings, set the value to "*:Error;*:Warnings".
The default location is set to [drive]:\Program Files\Microsoft Dynamics CRM Server\Trace. To change this, change the value of the TraceDirectory registry setting.