Whenever I consider algorithms/data structures I tend to replace the log(N) parts by constants. Oh, I know log(N) diverges - but does it matter in real world applications?>
The title of the question is misleading (well chosen to drum up debate, mind you).
O(log N) == O(1) is obviously wrong (and the poster is aware of this). Big O notation, by definition, regards asymptotic analysis. When you see O(N), N is taken to approach infinity. If N is assigned a constant, it's not Big O.
Note, this isn't just a nitpicky detail that only theoretical computer scientists need to care about. All of the arithmetic used to determine the O function for an algorithm relies on it. When you publish the O function for your algorithm, you might be omitting a lot of information about it's performance.
Big O analysis is cool, because it lets you compare algorithms without getting bogged down in platform specific issues (word sizes, instructions per operation, memory speed versus disk speed). When N goes to infinity, those issues disappear. But when N is 10000, 1000, 100, those issues, along with all of the other constants that we left out of the O function, start to matter.
To answer the question of the poster: O(log N) != O(1), and you're right, algorithms with O(1) are sometimes not much better than algorithms with O(log N), depending on the size of the input, and all of those internal constants that got omitted during Big O analysis.
If you know you're going to be cranking up N, then use Big O analysis. If you're not, then you'll need some empirical tests.