You have to increment the iterator first (with i++) and then remove the previous element (e.g., by using the returned value from i++). You can change the code to a while loop like so:
std::list<item*>::iterator i = items.begin();
while (i != items.end())
{
bool isActive = (*i)->update();
if (!isActive)
{
items.erase(i++); // alternatively, i = items.erase(i);
}
else
{
other_code_involving(*i);
++i;
}
}