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You may run into this error message. I did on both my Ubuntu 12.04 and 12.10, 32- and 64-bit respectively, desktops even though both had more than enough disk space. Just hit OK and continue on. This seems to be a harmless glitch.
At this point, you'll have the Steam client installed. From here you'll need to either create a new Steam account or sign into your existing account. If you an account on another operating system it will work fine here too. Just keep in mind that not all the games you currently have on your other systems work yet on Linux.
Once you've logged into Valve Software's Steam server you'll see your Steam game library for Linux. This display will be empty until you've downloaded some Linux-compliant Steam games.