Dude, I think the following patch will fix it:

```diff

commit bde04db9b83d520f8283ea45b2493511c9919ff7
Author: Aaron Patterson <aaron.patterson@gmail.com>
Date:   Sun Feb 19 11:21:35 2012 -0800

    fix invalid memory accesses in `in_context`

diff --git a/ext/nokogiri/xml_node.c b/ext/nokogiri/xml_node.c
index df1bceb..03f0551 100644
--- a/ext/nokogiri/xml_node.c
+++ b/ext/nokogiri/xml_node.c
@@ -1218,7 +1218,7 @@ static VALUE process_xincludes(VALUE self, VALUE options)
 /* TODO: DOCUMENT ME */
 static VALUE in_context(VALUE self, VALUE _str, VALUE _options)
 {
-    xmlNodePtr node, list, child_iter, tmp;
+    xmlNodePtr node, list, tmp, node_children, doc_children;
     xmlNodeSetPtr set;
     xmlParserErrors error;
     VALUE doc, err;
@@ -1229,6 +1229,8 @@ static VALUE in_context(VALUE self, VALUE _str, VALUE _options)
     doc = DOC_RUBY_OBJECT(node->doc);
     err = rb_iv_get(doc, "@errors");
     doc_is_empty = (node->doc->children == NULL) ? 1 : 0;
+    node_children = node->children;
+    doc_children  = node->doc->children;
 
     xmlSetStructuredErrorFunc((void *)err, Nokogiri_error_array_pusher);
 
@@ -1239,18 +1241,23 @@ static VALUE in_context(VALUE self, VALUE _str, VALUE _options)
     htmlHandleOmittedElem(0);
 #endif
 
+    /* This function adds a fake node to the child of +node+.  If the parser
+     * does not exit cleanly with XML_ERR_OK, the list is freed.  This can
+     * leave the child pointers in a bad state if they were originally empty.
+     *
+     * http://git.gnome.org/browse/libxml2/tree/parser.c#n13177
+     * */
     error = xmlParseInNodeContext(node, StringValuePtr(_str),
 				  (int)RSTRING_LEN(_str),
 				  (int)NUM2INT(_options), &list);
 
-    /* make sure parent/child pointers are coherent so an unlink will work
-     * properly (#331)
-     */
-    child_iter = node->doc->children ;
-    while (child_iter) {
-	if (child_iter->parent != (xmlNodePtr)node->doc)
-	    child_iter->parent = (xmlNodePtr)node->doc;
-	child_iter = child_iter->next;
+    /* xmlParseInNodeContext should not mutate the original document or node,
+     * so reassigning these pointers should be OK.  The reason we're reassigning
+     * is because if there were errors, it's possible for the child pointers
+     * to be manipulated. */
+    if (error != XML_ERR_OK) {
+	node->doc->children = doc_children;
+	node->children = node_children;
     }
 
 #ifndef HTML_PARSE_NOIMPLIED
@@ -1456,3 +1463,5 @@ void init_xml_node()
   decorate      = rb_intern("decorate");
   decorate_bang = rb_intern("decorate!");
 }
+
+/* vim: set noet sw=4 sts=4 */
```

It looks like libxml2 is [freeing a node list](http://git.gnome.org/browse/libxml2/tree/parser.c#n13177) which may get assigned to the child pointer [here](http://git.gnome.org/browse/libxml2/tree/parser.c#n13086).  If `node->children` for the node passed to the function is NULL, then libxml2 doesn't seem to be setting the pointer back to NULL.

Either way, it seems safe to assume that in context parsing *shouldn't* manipulate the original document.  If that truly is the case, then reassigning the child pointers after parsing seems like a valid fix.