The funky.log.zip shows no errors directly connected to JBoss Tools, but it shows errors in Eclipse JDT and net.rim.ejde.A.I.L.A (which I assume is Blackberry Rim plugins).
Any chance you installed other plugins than just JBoss Tools that might cause some problems in combination ?
btw. I would really like to "see" what is going on here - anyone of you that could use Jing or similar to create a screencast of what goes on ?
And as Denis asked, what kind of update is it you are doing ? Mixing stable, dev and nightly updatesites are not recommended.