I have a similar problem on a PC running Ubuntu 12.04 LTS - Firstly I get File Sync error auth failed (AUTH FAILED) then a box headed "Ubuntu One experienced an error" and with "Sorry, an error has occurred and Ubuntu One needs to close."
This thread has had 280+ reads and no replies so I guess it's only us then! I tried to remove and reinstall from this page, but as I have no menu item for Passwords and Encryption Keys under Accessories I am unable to complete it. I've posted separately for that.
Did you get to the bottom of your problem?
Edit: I resolved the missing menu item using
as suggested by, and with thanks to Irihapeti
sudo apt-get install seahorse