When you set a space limit in a cpanel account, does that also count the mysql database? If not, how can I keep track of the size of individual databases?

i believe it doesn't include the mysql database in the quota.. and not sure how you'd go about monitoring that :(

you could just view the databases in ascending order of size in phpmyadmin's database statistics

So how do most hosts add the customer mysql databases into the total quota manually? Or do they just not count it? I would think it's un-wise to NOT count the size the a customer's mysql database(s). What do you guys think?

I dont think there is a way to quota a MySQL database. One way I could think of would be to make the directory where the database sits owned by the group of the site. Then have a group quota. The only problem is mysqld might crap out when the group that owns the database goes over the quota and mysqld cant write to the disk for that particular database. The best way is to just wait for the MySQL team to integrate quotas.