I was receiving various updating errors such as ‘unable to install in default location’ and ‘not enough space to update’ when apps where attempting to update.
After much searching found http://forums.androidcentral.com/samsung-galaxy-s-ii/272384-galaxy-s2-cannot-download-updates-new-apps.html
Following the advice of dialing *#9900# on the phone it presents a menu. Selecting the second option of Delete dumpstate/logcat cleared an additional 450MB on the internal storage!