Is there such a thing as a Java Webstart Log viewer?
Yes, you can track an output from webstarted files. You need to run javaws.exe and turn logger on (somewhere on menus).
I have it enabled -I just want to read the output - instead of acting like a human xml parser
Wrote something like that, but it was really bad. Now its only a bit bad 
http://kaioa.com/k/JWSLog.jar (~7kb, source included, double clickable)
It uses some property for remembering the last directory/file. The log itself is displayed in a splitpane… top is flat messages (1.4 ish) and bottom is a table (with all that stuff you usually dont care about).