...you can upload to Google Docs any file up to 250 MB. You'll have 1 GB of free storage for files you don't convert into one of the Google Docs formats (i.e. Google documents, spreadsheets, and presentations), and if you need more space, you can buy additional storage for $0.25 per GB per year...According to the response to questions in the Comments in this blog entry, the additional storage is shared between Picasa Web Albums, Gmail and Google Docs. The cost is described on this page. Picasa (images) provides 1 GB free storage, GMail provides 7+ GB free, and now GoogleDocs provides 1 GB free. You can't share free storage between applications, but if you upgrade even the smallest amount (20 GB for $5 per year), you can use that extra storage in any of those tools.
The Google Enterprise Blog Entry indicates that this capability is available to GoogleApps users (also for GMail accounts). For now, the Documents List API will only be available to GoogleApps Premiere domains (what about Education Edition?).
Assuming this functionality is available to Education accounts, for ePortfolios, we finally have our digital archive that will hold any type of file. GoogleDocs Folders can also be shared. I can hardly wait to see how it works. Will the files have an Embed code? Are they individually linkable? I am specifically looking for the ability to embed audio files, much as we can do with YouTube videos. Will it be easy enough for a primary student to use??? Some of the comments in the blog are asking for a DropBox-type of interface (synchronize contents of folders). I agree!
UPDATE: In response to public requests, Google increased the maximum file size to 1 GB while also adding a Thumbnail view to your GoogleDocs Home page (Documents List).