After receiving the email, I fired up System Prefs and clicked on .Mac. It said I only had 125mb of iDisk space. But wait that email from Apple just said I had 250mb of space. So I logged into my .Mac account, and it also showed the same 125mb for my iDisk.
But if you click on Account on your .Mac homepage (down near the bottom of the left-hand column of links), you will see a button for Storage Settings. Click that, and you'll have access to switching your iDisk and .Mac mail 250mb storage settings. In my case, that meant moving to a setting that was more agreeable with my setup of not using the .Mac mail for storing my emails online -- I pull them off the server everytime. So I set my iDisk and .Mac mail ratio up to be 230mb for iDisk and 20mb for .Mac mail. Hope this helps others.
[robg adds: The location of the Account link wasn't intuitive to me, either. I assumed it was somewhere in the header, so you could reach it from any .mac page. Instead, you have to be on your home page. So hopefully this will save others some frustration, and thanks, Apple, for upping the storage limits. While it's not quite GMail, it's more than enough for me -- I have my ratio at 235 iDisk / 15 email, and would go even lower on email if allowed!]

