If you first quit the syncdaemon (you can do that by quitting the applet, or using killall ubuntuone-syncdaemon; make sure you have no nautilus windows open on the Ubuntu One tree or it will just start it again), you can move the whole Ubuntu One folder out to where you have more space (for which you need to change the permissions on the folder), and then create a symlink to that place from ~/Ubuntu\ One (the permissions will be changed back by the syncdaemon when it starts).
From the command line, that would be
killall -w ubuntuone-syncdaemon && chmod u+w ~/Ubuntu\ One && mv ~/Ubuntu\ One/ /media/SDHCard && ln -s /media/SDHCard/Ubuntu\ One ~/Ubuntu\ One
If you first quit the syncdaemon (you can do that by quitting the applet, or using killall ubuntuone- syncdaemon; make sure you have no nautilus windows open on the Ubuntu One tree or it will just start it again), you can move the whole Ubuntu One folder out to where you have more space (for which you need to change the permissions on the folder), and then create a symlink to that place from ~/Ubuntu\ One (the permissions will be changed back by the syncdaemon when it starts).
From the command line, that would be
killall -w ubuntuone- syncdaemon && chmod u+w ~/Ubuntu\ One && mv ~/Ubuntu\ One/ /media/SDHCard && ln -s /media/ SDHCard/ Ubuntu\ One ~/Ubuntu\ One
and then you click 'connect' on the applet again.