Unable to update apps directly from iPhone?

When I try to update an existing app or buy a new app on my iPhone 4, the password box comes up, I type in the correct password, a few seconds later, the same password box comes up and I type in the correct password again, a few seconds later, my original purchase/update request seems to be cancelled.

I have tried signing out and in inside "Settings"
I have just upgraded my iOS to the latest version, but still no luck.

What do you advise please?

This happened to my cousins iPod just the other week. My brother was trying everything to fix it no luck, took it to an apple store. They reset the whole thing and it was working again. They did tell us there was a way to fix it, but for some reason it didn't work. Best thing is to take it to a store and get there to reset (make sure you tell them not o delete the existing stuff) and go from there.