Sandbox size is unlimited, According to the iPhone Application Programming guide:
To manage program memory, iPhone OS uses essentially the same virtual memory system found in Mac OS X. In iPhone OS, each program still has its own virtual address space, but (unlike Mac OS X) its usable virtual memory is constrained by the amount of physical memory available. This is because iPhone OS does not write volatile pages to disk when memory gets full. Instead, the virtual memory system frees up volatile memory, as needed, to make sure the running application has the space it needs. It does this by removing memory pages that are not being used and that contain read-only contents, such as code pages. Such pages can always be loaded back into memory later if they are needed again.
If memory continues to be constrained, the system may also send notifications to the running applications, asking them to free up additional memory. All applications should respond to this notification and do their part to help relieve the memory pressure. For information on how to handle such notifications in your application, see “Observing Low-Memory Warnings.”