I currently use hosted Exchange with The Message Center Exchange Hosting
I have 3Gigs of storage space, but it's my understanding that using so much can somewhat slow down your system. There is a 50mb attachment limit, although most ip's will only allow for attachments of about 35mb. And there are a few different archiving options as well, many of them compliancy related. I've been very happy so far with their service, you might want to check out their homepage as there could be more detailed answers to your questions there.