If this is Server 2003 (RTM) and not 2003 R2 then you'd be using Disk or
NTFS based quotas which apply to and are calculated from the volume level
not the directory or folder. Users are 'charged' for usage based upon file
ownership, not where the file is located. So, if I own the file and place it
in some other folder, the quota is still charged to me,
Also note that temporary files are also charged quota and can easily nudge
one over the limit.
2003 R2 FSRM quotas work differently.