System Error #1 does not necessarily mean it is ‘permission’. In fact you should be presented with a message to indicate if this is the case.
This could be a number of reasons. for instance trying to update a date/time field with TEXT.
Go to the Connection | Action and run the ‘test’ there where you can enter in data that you are expecting to collect on the form (with the forminstance ID all the time of course so the instance can be found) step by step to isolate the specific field involved with this problem.
If you are unable to track this down though, please export our your 2 forms and the connection & action and send over to firstname.lastname@example.org (with any relevant information on the data that will be initially entered on the form that is being updated) and we can check it out