FIM: Updating Set Fails/ Timed Out

What I will be describing has been explained before to be honest:

• http://social.technet.microsoft.com/Forums/en-US/ilm2/thread/d7761296-6ed2-4c43-80b7-547cf4c897fb
• http://blogs.msdn.com/b/darrylru/archive/2010/02/02/extending-fim-timeouts.aspx

However I want to add some additional context information. The issue I was seeing is that with a FIM Portal setup, which has quit some objects in it's database, certain actions failed. I got the generic FIM Service error when trying to add some conditions to a dynamic set. The errors you receive might differ. Perhaps it's the generic "an error has occurred", or you get "Access denied", or like shown below: Timed out.

In the Event log some errors are displayed as well:

[...]