Each friend you refer to Dropbox yields 500 MB of free space for Dropbox Free accounts or 1 GB for Dropbox Pro subscribers. In total, Dropbox Free accounts can earn up to 16 GB (for a total of 18 GB plus whatever other free space you've earned), and 32 GB for Dropbox Pro accounts (in addition to the amount you paid for already).
To get started, simply invite your friends to Dropbox from the referral page. All your friends have to do is use the link you send them to create an account via the Dropbox desktop application. Once you do, you both get 500 MB of free space automatically added to your accounts.