In addition to what Mikel said, uncontrolled growth of the log file can have adverse consequences in a synchronizing (MobiLink) or replicating (SQL Remote) setup.
That is a "for the record" reply, since folks who administer MobiLink and SQL Remote are well aware of the log file ( or become aware in short order : )
As for the nightly backup, presumably a full backup of both log and database files, then yes, IMO the log should be restarted. The resulting savings in backup space means that 2x more archival backup copies can be maintained. BTW the verb "truncated" does not apply in SQL Anywhere; the log file can be deleted but not updated... it's not just a terminology issue, other DBMS products work differently.