Any solution where you prune the file dynamically is going to be horrifically expensive, I fear.

If you want to limit space usage to, let's say, 1 meg, why not just set up a rotation among 4 250k files?

That way, you always have at least 750k of history, and you're not constantly shuffling data around...

Make that 5 files if you want to guarantee a meg of history, at the cost of possibly 250k extra disk usage. Not too painful.
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Mike