A message says I am limited to syncing folders in c:\My Documents\ .
Do I understand this correctly? If so, it looks like a stupid design decision to me.
Ubuntu One FAQ makes it clear that you can select only those folders in your Home directory to synchronize.
You can probably try symlinking/creating a junction in Windows to try put content from outside folders into your Ubuntu One folder and try syncing it+.
+note that I haven't yet tried this.