Hi Mark,
Latin1_General_CS_AI is what Microsoft recommend for a shared hosting environment; changing a specific database collation takes around 10 seconds, it can be done directly through most sql management programs.
We can't force people to lose (via a backup schedule for example) their transaction logs (there would be a riot). We truncate the logs for unused data on a set schedule per
http://support.microsoft.com/kb/873235 but instant gratification for removing SQL logs has always been this way. If your log is too big for the import, I can only suggest raising the DB and/or log size, however temporary that setting may be. It's just a by-product of importing a large database in to SQL Server 2005.
Based on Microsoft's advice, the collation was set. Out of curiosity, I just ran a check on this DB server to see what the most commonly used collation was and it does appear to be
Latin1_General_CS_AI that is most commonly used. If the trend changes then we'll reevaluate the situation like with most other software instances.
Like always, if you'd like to discuss your options with this instance, please create a ticket so one of our server administrators can discuss it with you. They'll be happy to, for sure.
Thanks!