Yes. The log files in the /var/log directory are getting written to. If I select the system.log under the LOG FILES section in the Console App I see data.
Edit: On my computer with 10.5.4, it appears the log is in /var/log/asl.db. On my computer with 10.5.6 that file doesn't exit. In its stead is a /var/log/asl directory with an empty file in it called StoreData.