Just recently that Yahoo announced their unlimited mail storage for their customers.
Google is not going to stay quiet and come out with a...funny idea - "Infinity Plus One":
Greg Tomkins, an engineer at Google, is credited with coming up with the "infinity plus one" idea. "I was out in the yard when my kids ran up to me yelling at each other. My son said to my daughter, 'I hate you to infinity.' She replied, 'I hate you to infinity plus one.' And right then I knew I had the solution to competing with unlimited storage," said Tomkins.
"Read More".
According to news I found around the web - BBspot, est., Google will be using hdd RAID technology which allows them to create copies of e-mails stored in Gmail. If anything happens like their server crashed, they'll be able to restore your mails from the backup (the "Plus One" I suppose).
Aside of Gmail, Hotmail are as expected, not going to follow the wave. A representative of Hotmail said something like:
"While we can't offer unlimited storage, we can delete all your e-mail at random intervals in conjunction with our Live OneCare service, to make sure you never run out of space."
Another "funny" responce from Hotmail I see. Maybe I should tag this news as "funny"