Same problem here. Upgraded to Karmic yesterday and updated right now. 
U1 worked well for a day, then, after a system-crash, I'm now in the 
authentication loop. I tried to remove and reinstall by following 
https://answers.edge.launchpad.net/ubuntuone-client/+faq/778 without results.

Other detail:
The crash was not related to U1, I guess, but to my old graphic card problems 
(it happened during a screensaver-preview), but maybe U1 was syncing during 
crash (?).

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UbuntuOne stuck in an endless authentication loop (always changes to 
«Authentication failed»)
https://bugs.launchpad.net/bugs/437165
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