I have no problem installing and updating official application store software but when you have too many applications and you try to use Cydia, it tries to rebuild the application map after installing something and then locks up the device. After rebooting, it tries again and again to rebuild the application map but fails because it takes longer than the watchdog process allows.
This is documented here: http://www.hackint0sh.org/forum/showthread.php?t=49782
I've seen some say that Cydia is not to blame but this has happened to me 3 times and Cydia was the culprit each time. I was able to install apps successfully from Cydia before syncing the official apps to the phone which supports the idea that Cydia can't handle a phone with too many apps on it.