Microsoft® SQL Server® 2008 Internals (Developer Reference)
The SQL Server transaction log isn't meant to be "human readable". It's meant to support SQL Server, allowing transactions, read consistency, etc etc.
If you really want to understand SQL Server internals (including how the transaction log works), I strongly encourage you to get a copy of this book:
SQL Server 2008 Internals, Kalen Delaney
It's an excellent book; you will learn a LOT of practical and important information. Satisfaction guaranteed!
In simplistic terms, if you are talking about an OLTP database, your throughput is determined by the speed of your writes to the Transaction Log. Once this performance ceiling is hit, all other dependant actions must wait on the commit to log to complete.
This is a VERY simplistic take on the internals of the Transaction Log, to which entire books are dedicated, but the rudimentary point remains.
Now if the storage system you are working with can provide the IOPS that you require to support both your Transaction Log and Database data files together then a shared drive/LUN would provide adequately for your needs.
To provide you with a specific recommended course of action I would need to know more about your database workload and the performance you require your database server to deliver.
Get your hands on the title SQL Server 2008 Internals to get a thorough look into the internals of the SQL Server transaction log, it's one of the best SQL Server titles out there and it will pay for itself in minutes from the value you gain from reading.
Here are three great books, if you could buy only one and wanted a reference I'd recommend the first
SQL Server 2008 Internals
2008: T-SQL Programming
2008: T-SQL Querying