I gues Xorg.0.log is copied to /home/user so that you can actually have a look at the log in case it's necessary.

This is done at /etc/event.d/xomap, where BTW you can change the startup options (look for variable "XORG_OPTIONS") as well as the parameters for dsmetool (remove "-r" if you don't want dsme to reboot the N900 when X dies or is killed -> but then you'd need a framebuffer as well as a way to change to another virtual terminal, and obviously a listening terminal (getty)).

The cp /tmp/Xorg.0.log /home/user is done by the post-stop script, which presumably happens when you (cleanly?) reboot the N900.