With one difference; It won't let me update even though no obsolete or failed packages were found.
The solution was to start from the commandline using the -f option:
pfexec pkg image-update -fv
DOWNLOAD PKGS FILES XFER (MB)
Completed 846/846 39788/39788 583.4/583.4
Removal Phase 17782/17782
Install Phase 26718/26718
Update Phase 46466/46466
PHASE ITEMS
Reading Existing Index 8/8
Indexing Packages 846/846
Indexing Packages 846/846
Optimizing Index...
PHASE ITEMS
Indexing Packages 837/837
A clone of opensolaris-6 exists and has been updated and activated.Install Phase 26718/26718
Update Phase 46466/46466
PHASE ITEMS
Reading Existing Index 8/8
Indexing Packages 846/846
Indexing Packages 846/846
Optimizing Index...
PHASE ITEMS
Indexing Packages 837/837
On the next boot the Boot Environment opensolaris-7 will be mounted on '/'.
Reboot when ready to switch to this updated BE.