Stephen,
Their is work being done server-side to fix this. In the meantime their is a 
workaround.

   1. Quit Ubuntu One Preferences (if open)
   2. Open System->Preferences->Passwords and Encryption Keys
   3. Click on the arrow next to "Passwords" to expand the list
   4. Right-click on the Ubuntu One token and select "Delete"
   5. Go to https://one.ubuntu.com/account/machines/
   6. Click on the checkbox next to your computer
   7. Click the "Remove selected computers" button
   8. wget  
http://people.canonical.com/~roman.yepishev/ubuntuone-scripts/ubuntuone-old-auth.py
   9. python ubuntuone-old-auth.py
  10. A browser should open and you should be prompted to add your computer

thank you,
duanedesign

-- 
AUTH_FAILED on new install
https://bugs.launchpad.net/bugs/626741
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