Don't you need to link the tables based on a criteria, though? When I do a join in MySQL, I use something like
SELECT t1.foo, t2.bar FROM t1 LEFT JOIN t2 ON (t1.id=t2.id);
Even if you aren't doing a left/right join, I would assume you need to specify the common key with an ON statement or similar?
Alternately, you might try bracketting the where clause in your original statement...
UPDATE rest,item SET rest.total=COUNT(item.rid) WHERE (rest.id = item.rid);