Well first Google announced their gmail with 1000MB of space.

Yahoo then increased their limit from 4MB to 100MB for free accounts.

Today, Microsoft (Hotmail) announced their storage limit for free e-mail will be increased from 2MB to 250MB (with attachment limit of 10MB). [this change later this summer - which with Microsoft means the next couple of years] :-)

Hotmail will also have "Hotmail Plus" for $20 a year - 2GB of online storage, and up to 20MB file attachments.