In a blogpost Jono explained a nice way to test the latest version of Natty. Under point four he proposes:

Step 4: Update

Although you installed the latest daily you should ensure it is up to date, and you can do this with:

sudo apt-get update
sudo apt-get upgrade

Now, I followed all the steps and am actually writing this question from a session running on a 4GB USB stick. When trying to update the installation though (I just tried to do that using the Update Manager), it always fails because I do not have enough disc space remaining.

How can I get Ubuntu to update properly on my USB stick?