Our AD DC security logs go through between 3-5GB of logs a day during busy times, and there is just no way on this Earth to do anything with them via native tools. Some kind of log-parser is needed to make sense of them. I wrote one from scratch in PowerShell, and we've recently looked at Splunk. Splunk can keep up to the deluge and also keep up with our net-device syslog data (almost as big volume wise). All in one database. It'll take a beefy server to chew through that kind of data load, but that's a solvable problem. We're currently waiting on the right Dark Rites to complete so we can get funding for a centralized logging environment.
Having a "single pane of glass" as a view into the data is a good thing. What you won't get is an updating text-file you can then tail syslog-style. What you will get is an interface with a rich query system, and (I believe) an API for writing your own web front-ends for your own nefarious needs.
When it comes to Windows Event-log data, Splunk is not pulling out the XML version of those events, it's pulling out the "detailed view" text version of each event and parsing that. I had some real worries about scale there, but I was pleasantly surprised when it managed to keep up to our logging loads in spite of that; I had to go XML with my PowerShell script because text-parsing was taking w-a-y too long.