The latest log file full path is /var/log/postgresql/postgresql-8.4-main.log but the symbolic link is not the more integrated/easy way to change the data location.
I'd suggest to do it by creating the entire cluster to the desired location, with the pg_createcluster command that comes with the debian/ubuntu postgres packages.
1- delete your current cluster, if it does not contain any prior data:
$ sudo pg_dropcluster --stop 8.4 main
2- create a new cluster at the new location
$ sudo pg_createcluster -d /path/to/new/location 8.4 main
3- restart postgresql
$ sudo /etc/init.d/postgresql start
