Manage versioning by using quotas (Office SharePoint Server 2007)

Versioning enables you to store, track, and restore items in a Microsoft Office SharePoint Server 2007 list and files in an Office SharePoint Server 2007 library as they are changed. Versioning is not controlled at the server-farm level. It must be configured separately on each list or library. For administrators, versioning is a matter of concern. This is because if sites have many versions of files and documents, they can become quite large. If you do not set size quotas on sites, the sites can surpass storage capacity.

For more information about planning versioning, see Plan for versioning (Office SharePoint Server).

To configure versioning, you must be a member of the site owners security group. Because configuring versioning is a matter that is often out of the scope of the administrator's responsibilities, the way that the farm administrator can control the effects of versioning is by establishing service level agreements with site owners and by specifying size quotas on sites.
Create, edit, and delete site quota templates

To create, edit, or delete a site quota template, see Create quota templates (Office SharePoint Server)
source:technet.microsoft.com