Radhu,
You cannot create databases for logging in TestStand. TestStand only connects to existing databases to log its data. The following links should assist you in impletementing the logging. Rather than log to different databases you could log to different tables within the same database for each UUT.
http://www.ni.com/pdf/manuals/323435a.pdf (see chapter 6)
http://digital.ni.com/public.nsf/websearch/D30EC9BBA0D740C286256C760049DABD?OpenDocument
http://forums.ni.com/ni/board/message?board.id=330&message.id=601&requireLogin=False
http://digital.ni.com/public.nsf/websearch/D44A2FC939D893C386256D1A0078D013?OpenDocument
Test Engineer - CTA