Backup Solution - Question About Transaction Log

I've just inherited (i.e., our sys admin / DBA left the company) a fairly small SQL Server that's running 7 production databases. Most are quite small, but there are two which are about 40gb each. Traffic is quite low - ~30-40 users at one time doing your basic SELECT / UPDATE / INSERT stuff.

Anyway, I was going through some of the backups jobs and noticed that the transaction logs for each database were absolutely huge (in some cases bigger than the DB itself) which led me to think the log wasn't getting truncated.

The T-SQL being run in each case was

Currently, the transaction log for 6 DBs is backed up 3 times a day (and the 7th, "mission critical" DB is backed up every 15 minutes) with the following T-SQL:

BACKUP LOG <database> to <device> WITH NOINIT, NOFORMAT, NOSKIP, NOUNLOAD

5 of the 7 databases get a full backup twice a day, with the 2 larger ones getting a differential, with e.g.,

BACKUP DATABASE <database> TO <device> WITH NOINIT , NOUNLOAD , NAME = N'db', NOSKIP , STATS = 10, DESCRIPTION = N'db', NOFORMAT , MEDIANAME = N'db'DECLARE @i INT
select @i = position from msdb..backupset where database_name='db'and type!='F' and backup_set_id=(select max(backup_set_id) from msdb..backupset where database_name='db')
RESTORE VERIFYONLY FROM <device> WITH FILE = @i

This is then backed up to tape each night.

Looking through the documentation, those WITH commands are largely the default settings so I'm not sure why they're specified explicitly.

If I issue a

BACKUP LOG <database> to <device> WITH INIT, SKIP

then the log does get truncated. However, could someone explain the implications of that for me? As I understand it, INIT will overwrite any existing sets in the device, but considering that it will always backup anything that hasn't been committed then should it be a problem?

Alternatively could someone perhaps explain why the log wasn't getting truncated? It is my understanding that this should happen every time a full backup is completed... which is twice a day. Or does the Transaction log need to be manually shrunk every now and then?

Also, I understand the DECLARE... part in the last part of that DB backup SQL, but is it at all necessary?

Finally, does this backup strategy seem viable? Any thoughts and comments are appreciated!
Matt