I have a few pretty large models that I assist in updating and the most important thing I have noticed about the "Update Model From Wizard" command in EF v1 is that it does not delete ANYTHING from the CSDL. The SSDL might be 100% correct (and is in most cases). So there are two ways to handle this.
1) Modify / script the XML changes.
2) Make the changes manually in the designer.
I have tried very hard to get method 1 to work. It's not easy, but basically the best hint I can give you is to compare the SSDL to the CSDL version and you get very close (if you are only talking about columns).
The worst part is when you rename a table. Then every FK relationship that was built on that table in the CSDL is essentially duplicated (because a rename is really a delete / create, but then remember the wizard doesn't delete anything in the CSDL :-))
So, the easiest tip I have. Make your changes from the update wizard. Then compile only the .edmx project (keeping the designer open). After that is done, just double click on each error message and 'resolve the error'.
Resolving the error depends on the scenario. If it's duplicated columns, right click on the bad column name and click delete. If it's a bad FK, right click on that and delete it.
I remember someone on codeplex attemtping to do the update wizard with T4 templates (what they use with .NET v4 now). I just think it is a LOT trickier than it first sounds. I had attempted to do it, and when I got to scenarios such as 1..* *..1 multiplicity the xml and code in the t4 generator got really scary. So instead we just resort to 'resolve the errors' method.