Previous versions of Outlook can handle PST files just this side of 2 GB (1.82) and Outlook 2003+ can go up to about 20-30 gigs with the new MSUPST format. However, very few administrators are going to allow users to save anywhere near that amount of information.
Outlook does have a tool to managing the size of the mailbox from within Outlook:
Go to the Tools menu
Select "Mailbox Cleanup"
This dialog includes quick links to find large items of a chosen size and items older than a selected number of days. You can view the size of folders, fine tune AutoArchive and empty the deleted items folder.
[Edited entry from 2/1219/2006]
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