After talking to Technical Support the quota needs to be set in two locations:
- Web Applications > General Settings (I had it set here)
- Site Collections > Configure Quotas and Locks (I didn't have it set here)
There are several other pieces to the puzzle to make incoming email functional. Many of these are the functional rolse of a network and exchange administrator(s):
- Install and configure SMTP service on the SharePoint server via IIS Manager 6.0.
- MX Records in DNS
- Incoming E-mail settings in Central Admin. Setup as basic first, then advanced to allow SharePoint to create contacts in AD so they show up in the global address book... there are some exchange settings to make that work.
- Hub Transport --> Send Connector in Exchange 2010 (for local senders).
- If internet accessible: Firewall settings and spam filters.
- Important: Be sure to prevent spam and open relay when setting up SMTP.