All the documentation available about the use of "lightstreamer_log_conf.xml" is inlined in the sample file.

If you don't mind overloading "lightstreamer_log_conf.xml" with configuration for your (in-process java) Adapters, this would be the simplest way.
I don't know if using multiple configuration files for log4j could lead to conflicts (note that the Adapters don't use a separate classloader). Also consider that "lightstreamer_log_conf.xml" is reloaded at short intervals.

About problems with files, note that in "lightstreamer_log_conf.xml" relative pathnames are based on the "conf" directory because custom appender classes (defined by Lightstreamer) are used.
Standard log4j appenders, on the other hand, use the process launch directory to resolve relative pathnames.