you didn't understand clearly.. it's not wordwrapped the way you think, it's wrapped with hard coded RETURN keycode, so I just can't distinguish the 'real' RETURN from this 'wrapped RETURN'..
Check that its not been hard wrapped in the channel window, you may have some script doing it, then logging is just reproducing it. (actually that might not be whats happeing now i think about it), But I must say it isnt the normal actuion of logging.
I remember my logs being hard wrapped in the past, I always found that quite annoying, but I can't reproduce this now, though I didn't try too hard. It doesn't seem to be an issue of default vs scripted display.