fatal error updating assets

Hmm, that's strange. I suppose C4D could be saving the texture for your model (if you've set up UV maps) in the root directory "/" (either system root, root of the drive C4D is on, or the folder C4D itself is in) and Unity could be looking there for the texture. In your Cinema4D prefs you can set the locations for texture files, under the texture paths section. Make sure you don't have any relative paths in there because, for some reason, the app only uses absolute ones. That means that if you put "/" into one of those fields it will search for missing textures from the root of the system drive all the way down the hierarchy. That could not only confuse Unity (which only wants files inside the project folder and its subfolders) but causes big slowdowns in C4D too, as it attempts to search the entire drive for things.
Leaving all those fields blank is fine, and C4D will then fall back to the default, which is to keep textures in a "tex" folder in the same location as your scene file. Since this will be inside your project folder, Unity should have no problem with it.

I'm an associate with Michio and have the same problem. Our systems crash constantly in seemingly unprovoked situations with stock settings. Any attempt to modify, add, or import assets to a project constantly results in this error. We can't seriously use this developer with such instability.

Read and write permissions don't seem to be an issue. We are currently operating the software on our local drives and have yet to pour anything onto our project servers so it's unlikely a network issue.

I was going through the 3d Platform Tutorial and wanted to use an asset from the standard assets package. Just trying to import that assets package was enough to provoke the error and shut down Unity.

Again, thank you for any information you may have.

I think I have a fix for this. After much head scratching I found that the ADB.exe was left running have an android export was done. This process continues running even after unity is shut down and restarted and for some reason it seems to be causing this bug. What I found was if I forced ADB to close in the windows process manager the problem seems to be fixed

Are you doing android development? If so I think the problem is the ADB (Android Developer Bridge). It is a process which is spawned the first time an export is done to android but it continues to run after unity is closed down. For some reason it seems to be stopping the workinf directory from changing. try going into the windows task manager and forcing the process to stop