Welcome to Android Forums!
The problem is common to cards that are not mounted or have been not been cleanly mounted. It could also be an indication of a failing or failed SD card.
First thing I'd do is to try and back-up the sd card. Plug your phone into your PC with the USB cable and make sure that the PC is set to display hidden and system files. Then copy everything on the SD card to a folder on the PC.
Once you've done that, first unmount the phone from your PC. Depending on the OS you are using, it will be different. If you are using XP, Vista or Windows 7, you should see an icon in the system tray (lower right hand corner) that will let you safely remove hardware. Use this to unmount the phone. If you are running a version of Linux, it's generally just right clicking on the desktop icon and select unmount.
Then turn off USB storage on your phone and let it rescan the sd card. give it a minute or two, especially if you have a lot of apps on the SD card. If you can launch an app, you should be able to update it.
One other thing you might try is to temporarily move the app back to phone storage, update it and then put it back on the SD card.
