Sounds like we have exactly the same issue. Unsure of the cause (I was looking for support too.) I hope you have better luck than we have had. I actually had someone on the Adobe Help-line say that they don't recommend using this on a network. ??? I hope it was a communication issue.
Anyway, we have had good luck with the following.
When you update, watch the files that are updating as they go by. When it sticks on an ICML file (right before crashing), make note of the file name. After the crash, re-open the INDD file and find the story that you wrote down. In the Links window, unlink that file. Try to re-update. Hopefully it is one ICML file causing the crash. Your content may be in the ICML file to be re-imported.
I know it's 3 months later, but maybe we can exchange notes and try to fix what the underlying problem is.
Yes, changing to ICML does not work for us either. We have yet to lose content by doing what I described. It is a little convoluted, but it works for us. For some reason there is a disconnect between some of the ICML files and the INDD document. This issue stops ID from updating. If you unlink the "bad" ICML file, the others will update. (occasionally, you have to unlink more than one file.)
We use a lot of smaller stories, so it reduces the risk considerably for us. Still easier than working in MS Word for what we do though.
Digging a little deeper, everytime it crashes, it generates a ProtectiveShutdownLog: The log shows 4 APLN that did not load. Hoping someone from Adobe can jump in and offer some real support.
Adobe InDesign Protective Shutdown Log
Unhandled error condition
Session started up at 8:37 AM on Wednesday, June 27, 2012
Version: 7.5.3 - Build: 333
Error Code 0x20705: "The content is locked and cannot be modified."
Called to process command 0x21a
Command Processor Stack (from top to bottom):
9. Command 0x13513 "Create Hyperlink Text Destination"
8. Command 0x7304 "Import File"
7. Command Sequence "Import File"
6. Command 0x730a "Import File"
5. Command Sequence "Re-import File"
4. Command 0x7314 "Re-import File"
3. Command Sequence "Update"
2. Command 0x8c59 "Update Link"
1. Command 0x8c9f "Update Link"
Name ID Version Build Load Status
POSITIONTOOL.APLN 0x19b00 7 5 Load Failed
EDITOR HELPER UI.APLN 0x21101 7 5 Load Failed
INCOPYCOREUI.APLN 0x21201 7 5 Load Failed
INCOPYFILEACTIONSUI.APLN 0x21301 7 5 Load Failed
After many iterations, my very smart IT person removed the latest InDesign update, and everything was miraculously fixed. See my postings on the forum here: http://forums.adobe.com/message/4590158#4590158
As we continue to work with Adobe to get this fixed.