If you’re getting the above error, it’s probably because the app you’re trying to update is located on the SD card and – I think – for some reason Android or the app update can’t find it. Move it back to the phone’s internal storage and then try the update process again. It should complete properly this time. After that, you can keep the app on internal storage or move it back to the SD card again.
Update: Turns out that the above only fixes the problem temporarily. Complete fix here.