Yes it has unlimited storage space.Finally rediffmail came up with a e-mail service that gives you unlimited storage space. I have been using redifmail from the past 7 years.So i can tell with some confidence what i know about Rediffmail.It has both good and bad things. The screen shot shows what you get.But if you hate ads, you may not like it.See the screen shot below.
The new look is better than the older one,it has also features to "mark as read" and "mark as unread".all the feaures in older Redifmail such as creating folders and moving mail to folders is continued. So you dont get to tag ur mail as in gmail. No POP3 access for free users. However you can get it by upgrading to rediffmail plus.
The mail is displayed below the list of mails. So no time lost in moving from the in box to the mail. Gmail can take ages to move from inbox to the mail in my cyrixII system(Its a old system with 64MB RAM).But each good thing has its own set of drawbacks. The spam filter is not as good as gmail. So if you are giving out ur email id on a website, you may get spammed.
Rediffmail shows a large number of advertisements. No google adsense.they use their own ad formats.They do have popups which can be blocked while using firefox.You can see a maximum of 10 mails per page.The search mail feature is not as fast as gmail. If you still feel it is worth having a mail id at rediff go get it for free at rediffmail.