Stan,
It sounds as though you may have left out the LogMaxBackup setting under ns/parameters? I'm pretty sure you need that *and* LogRoll on for the log rotation to occur (though I didn't read the AOLserver source to confirm this!).
The nsd.tcl in my current AOLserver RPMs seems to "just work" in this regard, under AOLserver 3.2-4+ad12 or AOLserver 3.3.1+ad13; I can upload it to new-file-storage separately if that would be helpful.
