A good place to look is:
http://dev.mysql.com/doc/refman/5.0/en/slave-logs.html
Check out the part about :
A slave server creates a new relay log file under the following conditions:
* Each time the I/O thread starts.
* When the logs are flushed; for example, with FLUSH LOGS or mysqladmin flush-logs.
* When the size of the current relay log file becomes too large. The meaning of “too large” is determined as follows:
o If the value of max_relay_log_size is greater than 0, that is the maximum relay log file size.
o If the value of max_relay_log_size is 0, max_binlog_size determines the maximum relay log file size.