Error Importing Organization in CRM 4.0:

Error: Import Organization (Name=, Id=) failed with Exception:System.Data.SqlClient.SqlException: The transaction log for database 'XXXX_MSCRM' is full. To find out why space in the log cannot be reused, see the log_reuse_wait_desc column in sys.databases

This error suggestes that the database transaction log has grown beyond maximum size or disk is full. The odds are that you have a fairly large database reaching a few GB. There are 2 possible solutions here...

Solutions 1
Since importing an Organization in CRM 4.0 will involve a lot of work, the transaction log occasionally tends to become unmanageably large. First try to lower the log size.

In the database properties screen set "Recovery Mode" to simple:

Now remember to change this setting back to "Full". This is only dependant on your system's recovery strategy.

If you don't have at least Update Rollup 8 installed then it may be time to do so now. This provides a new and improved Organization Import functionality as described here (http://support.microsoft.com/kb/977867). Remember that you would still need to add and set the new registry key "OptimizeOrgImport" manually.