On this page you set the name, type and logging level of the logging target.
You don't need to worry if the type is text or XML. XML has the advantage of being viewable via DataPower's view logs screen, but text has the advantage of containing more information and easier to humanly read. Either way, DPAA's aggregated screen for displaying logs will be able to read it.
The logging target, by default, will subscribe to "all" at the selected level.