Apple has done a huge revamp of its Mail application. By default, you don't even see your list of Mailboxes along the left side of the main window. You can restore that view simply by going to View/Show Mailbox List.
Unfortunately, in my case, the Mailboxes were displayed much larger than I had them set in the previous version of Mail, with no available way to change the size from within the Mail app. The View/Use Small Mailbox Icons command is gone.
After a bit of digging around, I found the solution. Apple apparently now considers the Mailbox list to be a Sidebar, similar to the Sidebar in a Finder window. To change the size of the Mailbox List, navigate to System Preferences » General, where you will see a new option -- Sidebar icon size, with a choice of Small, Medium and Large. In my case, it was set to Medium. Simply choose your favorite size and your Mailboxes will now look the way you want them to.
One caveat: this setting affects ALL Sidebars, including those in the Finder. There is no longer a way to set the Mailbox size separately. Now, that would be a nice one for someone to figure out.
[crarko adds: I tested this, and it works as described. I don't know about other people, but I prefer that application preferences be tied to the application, and not a global setting like this.]
Mac OS X Hints