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There has been some chatter in a number of forums on setting mailbox limits. 

• How big they should be 
• Should they be used at all 
• Good practise to work with limits.

One of the first questions people ask is whether there is anything official from Microsoft on limits of mailboxes. At the time of writing there are only broad recommendations. 
That would be like a car manufacturer telling you how fast you can drive your car. The only limit is its top speed (the size of the Exchange database).
Setting mailbox limits depends on many factors, and the sizes used are different for every company. You may need to have different limits for different people.
When deciding on the limits, some of the factors you need to consider are:

• number of users 
• number of servers 
• amount of disk space 
• regulatory or legal requirements 
• types of messages being sent.

A 100mb limit might be good for sales people, but marketing or designers who often move around large files might require a larger limit.
You may also need to have larger limits for VIPs, who will often demand the larger limit "because they can".
In all cases, the maximum limit you can set though the GUI is 2gb. If you want mailboxes to go larger than that then you have to use adsiedit.msc. If you don't have access to that tool, they will have to be unlimited. 

Mailbox Limits Good Practises
When I deploy limits I always limit down, not open up. The global limit is the largest that anyone can have (is effectively the default) and then users or groups are limited down from that point. It provides a simple safety net in the case of a problem.
Even if the client isn't using limits, I will often set a global soft limit of 1gb, which puts a check in place in case any mailboxes get out of control. If the mailboxes are small, then it can be set to a hard limit.

Managing Limits
The easiest way to manage limits is to use separate storage groups and databases. This is only available in Exchange Server Enterprise edition. Try to avoid setting limits on individual mailboxes as this increases the administration of the system.
If you are on Exchange standard edition or SBS and want to vary the mailbox limits, you will need to set them on each mailbox. Use a tool like admodify.net to set the limits in bulk.
Remember to limit down rather than open up.

Hard and Soft Limits
I have already mentioned these two types of limits.
A hard limit stops the user from doing anything with the mailbox until they have removed some content.
A soft limit simply sends tem messages saying that they are over the limit.

Mailbox Limits Drawbacks
Mailbox limits will not solve a email storage problem.
If you place limits on mailboxes then you will always have the "pack rats" who want to keep everything. They will then move their email to PST files, which are even worse.
An email message stored in a PST file will use up to three times the space the messages does within the message store.
You will also loose single instance storage, which could further increase the size of the PST file. Consider this - if you send a 5mb attachment by email to 10 people, then it takes up 5mb in the Exchange server due to single instance storage. It will use at least 50mb when stored in PST files.
Then there are problems with backing up the data - a PST file is very difficult to backup. It shouldn't be stored on the network, and if the file is open in Outlook, then it will be locked.
 
Alternatives to Mailbox Limits?
If you want to limit the amount of email that users store in their live mailbox, but don't want them to use PST files, you need to look at deploying an additional application.
An ideal tool would be a journaling application such as GFI Mail Archiver. This stores a copy of every email that passes through your server and stores it in an SQL database. Users can then get access to those messages and get a copy sent to them so that they have it in Outlook.

Archiving Email
The term archiving is being used by the software industry to refer to two very different practises. You need to understand those differences, then select a product that meets your needs. 

• True Archive Product.
  This is an application that sits in the background on your Exchange server and extracts automatically old content and stores it elsewhere. A tag is left behind in the mailbox that points to the alternative location. As far as the user is concerned, this is transparent.
  This type of product is no good for regulatory use, as it still allows the user to tamper with the email message. 
• Journaling Product.
  This is a product that takes a copy of every message as it passes through the server. It does not touch the mailboxes in any way. Users need to manually manage their mailbox content, confident that they can get a copy of any message back from the database.
  Ideal for regulatory use as it stores a message is SQL which can show when the item was last modified.