Using a transaction log can provide data protection, and can improve the performance of the database server.
When operating without a transaction log, the database server performs a checkpoint at the end of every transaction which consumes considerable resources.
When operating with a transaction log, the database server only writes notes detailing the changes as they occur. It can choose to write the new database pages all at once, at the most efficient time. Checkpoints make sure information enters the database file, and that it is consistent and up to date.
The database file and the transaction log file must be located on the same physical computer as the database server or accessed via a SAN or iSCSI configuration. Database files and transaction log files located on a remote network directory can lead to poor performance, data corruption, and server instability.