When you have created a workflow with SharePoint Designer and it is activated when a user adds / changes and item, you receive and error that states that the workflow stopped because access was denied when trying to update a list item in another list.
You find that this only happens when a user other than one belonging to the "Owners" group activates the workflow.
In my scenario I was trying to create a list item with the workflow in a 'content approval' enabled list from a list that did not have 'content approval' enabled. It turns out that when creating a workflow with SD and you instruct it to create a list in an 'approval' list you have to specify what the value of the 'moderation' status is (pending, approved, rejected etc.), it is a compulsory field. Now, if the user who is creating an item does not have 'approval' rights then the workflow will not have the permissions to update the 'moderation' status in the 'approval' enabled list.
As yet I have been unable to locate the 'required' setting where the 'moderation' field (I have checked all the config files), the only one I found was already set to 'FALSE', althought with VS Workflow Designer you culd probabl get around this.
This has not affected my project too much as I have just re-worked the workflow and amount of lists. If anyone knows how to get around this in the meantime, be sure to post something somewhere.