I can only show you a screenshot of MSN Messenger 6.x, but it is the same in 7.x, only the layout is a bit different...
For MSN Messenger 6.x: Go to "Tools > Options > Messages" and you will see:
If you have enabled that option and thus have selected a directory there, chances are that the log can be found in that directory as an unencrypted XML log.
Open Windows Explorer and navigate to that directory. You can open the log itself by opening it in Internet Explorer (or any other xml compatible browser for that matter).
If you don't have a directory listed under that option, then there is nothing more we can do, the file is lost....