For some reason, every time I go and try and use an "IIF" statement in a control source on a report, where it involves a memo field, I get an error message that I have a comma in the wrong place, eg:

IIF([srm_memo] Is Null, " ", "Update")

Is there something about memo fields that makes this approach not workable?

It's not the IIF part, you have that correct... try changing the statement to

IIF(IsNull([srm_memo]),"","Update")

...and it should work fine