you saw the limitation with the size if you install Ubuntu with the Windows Installer, but there are more:
Compared with a regular installation, a Wubi installation faces some limitations. Hibernation is not supported and the filesystem is more vulnerable to hard reboots. Also, if the Windows drive is unmounted uncleanly (Windows crash, power failure, etc.), Ubuntu will not be able to mount the Windows drive and boot until Windows has successfully booted and shut down. If the Windows system cannot be booted after the crash, the user also cannot boot Ubuntu.
Performance related to hard-disk access is also slightly slower, more so if the disk image file is fragmented, on a Wubi install compared to a normal one.
I suggest you to install it on the other, frequently used way: Step-for-Step introduction published by Canonical: http://www.ubuntu.com/download/help/install-desktop-latest (Step 4: Here you can choose the installation type. One step later, you can modify the sizes of each partition.