I think it's a bit counterintuitive that you can do this:

Parent.create(:child => { :field => :value })

but you can't do the same when updating:

parent_object.update_attributes(:child => { :field => :value }) (method 1)

Instead, you have to declare it with accepts_nested_attributes_for :child and call

parent_object.update_attributes(:child_attributes => { :field => :value }) (method 2)

I've forked mongoid and added some changes to allow updating embedded documents through method (1). allow_nested_attributes_for doesn't seem to apply to MongoDB's embedded documents.

Here's the link:

http://github.com/evansagge/mongoid/commit/6dc0af5