I got the same message on my iPhone yesterday when trying to update 2 apps. This has never appended before in a year of owning the iPhone, untill now on the same day I registered an iPad too. In my mind it is not a coding issue with the website. It is a device problem. I bet it you go to settings/usage, you will see as I did that you have almost no storage remaining. I deleted tons of apps just to get through this app update. I am truly frustrated. I am calling my carrier, Verizon and then going to Apple support.
I am wondering since you wrote you question in November 2012, have you found out what to do yet. If so, I would love to know what you did to resolve this?