Are operating systems getting better or just bigger?

Both...They are getting bigger (unless you count Snow Leopard), but they are also getting better. Even Vista was supposed to be an improvement to XP. Even though it didn't work out too well, it provided a good foundation for Windows Seven (I think that Microsoft should've given it out for free to all of the Vista users instead of making them pay $130 for the cheapest version).

Just look at Ubuntu. With their latest release, 10.04, they made it more social, while keeping it pretty much the same (except some visual changes).

I think that eventually, operating systems are going to be so advanced that if someone showed us what they look like 10 years in the future, people would freak out, because it has to be so much different than what we're used to now. One example being the Internet. The internet has changed so much over the last 5 years, that if you showed someone 5 years ago what the Internet would eventually become, they'd think that they're looking into a science fiction movie.

The world of technology is only going to become more advanced and will be changing so fast that some people will not be able to keep up with it, but all is all in the world we take our residence in.

Well it depends on what you mean by "bigger." Snow Leopard is more useful than Leopard, but it's also smaller in overall filesize (about 5GB smaller) for a clean install.