Yep, I was right, they were on crack. Here's the deal. The two guys I spoke with, one sales rep. and the other a sales engineer, both don't know diddly about their own product line. Apparently there is no such artificial limit on Oracle Standard Edition (SE) or Standard Edition One's (SE1) storage/DB size. The differences are solely features, such as "gridding" is not available on SE1, but is available on SE. You do have to go to Enterprise edition for the "Advanced Management" capabilities, advanced security features, or the capability to add-on the Oracle Spatial extension. SE and SE1 apparently can each deal with 8-ExaBytes of data.
Those two guys, couldn't understand simple phrases like "We will only have 5-users for the first 6-12 months of the project." and actually got all their aforementioned product capabilities off the Oracle web site, but were too dumb to notice that those were on marketing-recommended configuration guidelines. I imagine they go something like this:
If the potential sucker is actually going to use the database software, up-sell them from the $149/seat license to the $5,000/CPU license license, but using the phrase "high-availability". If the potential sucker says that they will have 500GB or more of data, up-sell them to the $80,000 software from the $10,000 software.
Lesson learned, if you have to talk to Oracle, go straight to a Regional Sales Manager. He was the only one that both understood the product lines and could comprehend our VERY SIMPLE needs.
Yo! Larry Ellison! Train your staff!