There are lots of ways they can be updated. Older systems use DVDs -- so you just put in new DVDs and the maps are updated. Newer systems can be accessed by the technicians using standard or proprietary ways of connecting. I suppose it is just like having a USB connections.
The built in ones don't "break" -- but, like any computer, the operating system or software might need to be reloaded. They reboot every time you start the car.
My only thought on the built-ins is how do you update the maps? You can't exactly connect your car to the net to download updates?
If the built-in breaks, you're up for a huge repair bill. If the standalone breaks you buy a new one.