I was able to sync today in the morning (in Europe timezone). Itr was not 
automatic. I manually downloaded one of the files from u1, copied it to Ubuntu 
One folder and then did a touch command on it. It was immediately synced back 
to u1 and after couple of minutes I saw rest of the files started do download.
Soince then also i1sdtool -s looks much better

State: QUEUE_MANAGER
    connection: With User With Network
    description: processing queues
    is_connected: True
    is_error: False
    is_online: True
    queues: IDLE

I don't know if I was just lucky or that manual step helped, but it
surely works for me now.

-- 
U1 10.04 fails with the error: TRY_AGAIN, should log it in INFO
https://bugs.launchpad.net/bugs/573800
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