Can I set up a quota on the users's entire mailbox or a per-folder quota?
Not with SquirrelMail itself.
SquirrelMail doesn't do quotas. That is the responsibility of your server, the IMAP server, and whatever tools you have available to you. SquirrelMail is just a way to view what is in your mailbox. You could use Netscape, Pine, or a dozen other ways to read your mail.
Quotas can be enforced natively when using the Courier-IMAP server.
Quotas can also be enforced with the use of Qmail. The INBOX and mail folders are in the users home directories and are governed by their disk quotas.
Theoretically, a plugin could be designed to handle quotas, but nobody has written one yet. Usually this type of thing is best left up to the mail server itself instead of a mail client.
As for plugins that communicate with the IMAP server and display to the user their current quota usage, you can check out the "Quota Usage" or, "Check Quota" plugins in the "Visual Additions" plugin category at:
I've found several patch for handle quota with qmailadmin. You can find a full list of patch on qmail home page