It should be in whatever folder $mircdir points to (the same location mirc.ini is). Unless you put mirc.ini into your install folder, then you should find it in your Application Data folder. In Windows 7, that would be c:\users\yourlogin\appdata\roaming\mirc\ . It's something similar in Vista, but without "roaming".
Of course, from within mirc, you can just type /run debug.log and it should open it for you (or at least pop up the dialog asking what program to use to open it if you don't have notepad or whatever set up to load log files).