Where are the file located client or core?
If core than somebody has flipped on user rolling logs. The will be named LDInv32.exe2688_2592.log and be in the LDMAIN folder. To turn off:
Configure| Services | Inventory Tab | Advanced Settings | Scroll to the bottom and make sure Use rolling log is set to 0
What would this do?
This option is set to 1.
1 Creates very detailed logs for the inventory service since you can't xtrace the service anymore. This is only needed for troubleshooting/diagnostic scenarios, so I would change it to 0. The logs, depending on how busy your service is can become very large.