Search on here, there were dozens of posts about the same thing. The error message is not helpful at all, and it usually means one of two things is happening:

1) You have conflicting packages (click the "problems" tab when installing the update in Application Manager to see them). There's a list of several packages that caused most people trouble. Mostly games and healthcheck, IIRC.
2) You don't have enough free space in your rootfs. Needs about 37MB or more free space.