I already posted this elsewhere, but despite how extreme it sounds I'll bet it's not going to add up to quite how it sounds.
First of all, I'll bet that is 1000MB of text e-mail, not 1000MB including attachments. Were that the case, Google could use some of it's I assume considerable compression technology to reduce the size of the actual stored data--I'd bet a factor of 10 or even 100 is possible. They specialize in storing positively vast ammounts of indexed text, after all, and the PR even said GMail would be search-based.
The other important thing is that 99.9% of people do not, and never will, receive 1GB of e-mail. Most people probably won't get a tenth that in their entire lives. Take that average and compression into account, and suddenly you're not talking about much more stored data than most other free e-mail services offer, but it sounds a heckuva lot more impressive than 5MB free, and AdWords will probably make a lot more money for them than random banners.
This all requires two things to work, though: 1) No attachments, and 2) No spam. Spam could rapidly overload almost anything, so they're going to need some sort of significant spam filtering. But if anybody can profile a vast selection of messages to determine which are similar and which are not, it'd be Google.
Might just work, but I'll believe it when I see it.
Incidentally, I don't think Google is in need of publicity--they're already the 800 pound Gorilla, even with MS defaulting every single verison of IE to their own search engine. All they need to do is maintain their monopoly on finding information.
