The default clock in Ubuntu is too big and eat a lot of precious panel space, imo. Especially for netbook users with tiny screen. If you are like me, then you'll like this tip.
Run System Tools -> Configuration Editor, or type gconf_editor in terminal.

configuration editor
The result :

small and space efficient clock
This format may not what you want. If you want to have different format, read here and here for more formats and tags.
I wrote something like this earlier, but this time I found a way to make it smaller i.e. by inserting "small" tag inside <span size="smaller"> and using monospace font ("tt" tag).
keyword : custom clock, ubuntu, gnome
Run System Tools -> Configuration Editor, or type gconf_editor in terminal.
- go to /apps/panel/applets/clock_screen0/prefs/custom_format paste this as value
<span size="smaller"><small><tt>%b%d%a%n</tt><b>%H:%M</b></small></span> - /apps/panel/applets/clock_screen0/prefs/format
type custom as value

configuration editor
The result :

small and space efficient clock
This format may not what you want. If you want to have different format, read here and here for more formats and tags.
I wrote something like this earlier, but this time I found a way to make it smaller i.e. by inserting "small" tag inside <span size="smaller"> and using monospace font ("tt" tag).
keyword : custom clock, ubuntu, gnome



"type gconf_editor in terminal"
That should probably be "gconf-editor", right?
:p right, thanks Victor.
type gconf-editor in terminal.
ubuntu 9.10.I do not see clock screen after applet 5.Very much like to do modification
have you already added clock applet? if you already had, it doesn't have to be named clock_screen0. try to browse /apps/panel/applets/ for applet_? with bonobo_iid : OAFIID:Gnome_ClockApplet.
after i received your comment I installed another clock to see what applet-id it is assigned to. in my case it is assigned as applet_4.
hope it helps,
<span size="smaller"><tt>%a %d %b</tt> <big><b>%H:%M:%S</b></big></span>
works well for me. I really like the bold time. It stands out.