You can't limit the size of their diskspace via mysql easily. With 4.1.x you can limit the number of connections, updates, and queries per hour.
There are some tricks that you can do to limit the amount of diskspace they have but they are not very easy to do. Basically what you have to do is limit their account via linux or whatever you are using. Then you don't allow their user to create databases, you create the database for them and have it sim linked to their user directory. That way they can't use more space than they have available with their hosting plan.
Hope this helps.
Donny