It seems there is a rather nasty glitch in the console versions of the Sims 3 that freezes the game when trying to save at certain points. EA have stated that they are aware of the issue and are investigating it. As of this moment though, they have no idea of the cause or of how to prevent the crash. See above for a video of the bug in action. Seems fans will just have to wait for the bug to be fixed.
Thanks to Joystiq for the info.