Log windows serve to display some types of optional output from a test, or output from the debug panel. You can also open any text file as a log window, edit it, and re-save it, such as you might do in the Windows Notepad app. You might also use a log window to keep notes about your research process.
RealTest includes many features that use log windows for their output, such as the Test Details Log and Tomorrow's Orders list.
Another feature that uses a log window is the ability to list all the symbols that were used in a test result:
Another example is the Debug Panel interactive formula evaluation output.
There are many others as well.