Comment 8 for bug 495131

Edit your /etc/fstab to add a line putting /tmp into a ramfs device. See the below excerpt of fstab:
# /etc/fstab: static file system information.
#
# Use 'blkid -o value -s UUID' to print the universally unique identifier
# for a device; this may be used with UUID= as a more robust way to name
# devices that works even if disks are added and removed. See fstab(5).
#
# <file system> <mount point> <type> <options> <dump> <pass>
proc /proc proc nodev,noexec,nosuid 0 0

# update-manager cannot see any space in /tmp when ramfs used
ramfs /tmp ramfs size=256M,mode=1777 0 0
-------snip------

Reboot, and /tmp will be in a mounted ramdisk. The size=256M is unused, but will be reported by mount.
Most things will run fine if you really do have free ram, but update-manager will die with insufficient space errors
for any size (greater than zero) update.

Change the two "ramfs"s in the line to tmpfs, and things work with update-manager.