Awhile ago, I had a ArcSDE problem that required ESRI technical support to help trouble-shoot. The problem was odd but was resolved by rebooting the server.
During the process, though, the support person had me set a couple of environment variables for logging SDE activity on the client machine.

The settings were SDEINTERCEPT and SDEINTERCEPTLOC.

From ESRI’s Help, SDEINTERCEPT specifies what activity to log and SDEINTERCEPTLOC specifies where to save the log files.

I recently deleted the directory I made for the log files but did not remove the variables and I noticed that one of my python scripts reported a weird error (but continued to run, I think). I tracked it back to these variables and realized what I had done.

Googling SDEINTERCEPTLOC did lead me to some helpful information like:

The SDEINTERCEPT blog where Ken posts ArcSDE help.

This ESRI post about troubleshotting geoprocessing problems.

And this ESRI technical article about diagnosing ArcSDE Connections.