The author of Analog has written an article on how the web works and what can and can't be determined by analysing logs.

I have spent quite a lot of time working with both Analog and WebTrends. I recommend the former (with Report Magic) for people who want to understand site usage patterns and the latter for people who have lots of money and a willingness to base business decisions on nicely presented but completely meaningless numbers. Even when I phrase it exactly like that, it's amazing how many clients go for the latter.