This is related to the question 'Is there any way to force market to update and install apps one at a time?'. That question asks specifically if apps can be queued to update, rather than all run simultaneously, which I suspect is a possible (but perhaps not only) solution to my problem. The answer seems to be no for that particular potential solution.
When I go to the market and am notified of many of my apps having been updated, I have the option to 'Update All'. If I do this when I have a relatively low amount of internal storage available, I often end up with a lot of apps failing to update due to disk space problems. I have noticed in the past that updating each app one by one has allowed me to perform all of the updates without a problem.
My intuition is that updates are probably being downloaded to internal storage, so in the case that many updates are being performed at once, the internal storage fills up with a mixture of applied updates, and in-progress downloads.
Performing the app updates one by one allows each app to in turn be downloaded, applied, and then the download removed, before moving on to the next update. If the app is stored on the SD card, doing it this way should mean there is as much room left on the internal storage as before the previous update was applied, so the next can proceed and hopefully succeed.
Given that there doesn't seem to be a way to queue apps for updates (according to the answer to the above linked question), are there any other ways to avoid this problem?
Checking for updates more frequently in order to have smaller simultaneous batches is all I can really come up with for now.