To install the Guest Additions for an Ubuntu guest, you need to do the following:
* Open a terminal and type 'sudo apt-get install build-essential' to install the 'install from source' tools etc.
* Once that's complete, open the Devices menu at the top of the VM screen and select "Install Guest Additions".
* Ignore/dismiss any autorun prompt, and open Computer and double click the mounted VB Guest Additions to open the 'CD' to see the files.
* Copy all the files and folders from the opened 'CD' to the Desktop (it doesn't work right if you try to install directly from the actual CD/ISO as you need to change their permissions).
* Back in the terminal change directory to where the files are (for example 'cd Desktop' or 'cd /home/username/Desktop/folder').
* Now change the script file to be executable in Linux. For x86 installs do 'sudo chmod +x VB*x86.run' and hit enter. For x64 installs do 'sudo chmod +x VB*amd*.run' and hit enter.
* Now install the Guest Additions by running the script, like so: 'sudo ./VB*amd*.run' (for x64) or 'sudo ./VB*x86.run' (for x86).
Voilà. Once you reboot you should have a fully integrated and scalable desktop. Auto-resize is enabled by default, but you will likely find you have to double click the title bar (the top bar of the window the VM is running in) to un-maximise it, and then do it again to re-maximise it. That will "kick start" the auto resize and get you to a full sized screen. Done.

If I've missed anything feel free to post back - I did this from memory so there may be an omission. It looks OK to me though...