My guess is that you are doing ONLINE backups, otherwise you would not be messing with the logs. Unfortunately in V7, you have to deal with the db2 logs when performing an online backup, otherwise the backup image is worthless. This is to ensure that you can restore and rollforward the DB if needed.
There are some alternatives (although in V7 I am not sure what is supported anymore), like backing up directly to TSM, or other third party backup solution.
You should look seriously in upgrading DB2. The current version is 9.5. Although to get there you will have to upgrade to V8.2 first. V7 is no longer supported by IBM, and has not been for a couple of years. V8 and beyond give you more options using BACKUP like compressing the image and including the logs in the image.
Andy