How do I setup IIS to rotate logs?
There's no built in mechanism to handle log rotation or archiving. There may be third party products to handle this chore or you could script something and configure a scheduled task. I have only a handfull of IIS servers so I just set up a recurring Task in Outlook to remind me monthly to delete IIS log files older than 30 days.
A bunch of scripts are available, which you can add in the scheduled task = logrotation :)
Have a look at the IIS Logs tool (http://www.iislogs.com/). There are a couple of different ways to install this and does a very effective job at managing IIS and other log files (compress files to .zip format, move them to different locations, delete files past a certain date, etc.).