crm_update_contact() does not update custom fields

I'm trying to update/create custom-field values for an existing contact ($CRM). I've tried updating the custom field, and
$CRM2 = crm_update_contact($CRM,array('custom_12' => 'newvalue'));
doesnt work. On the other hand,
CRM_Core_BAO_CustomValue($CRM->id, 12, 'newvalue');
does, but that's a bad way of doing things I guess.

(in this example, 12 is the id of the custom field I'm interested in)

I couldn't see examples of custom field values being set in the test suite, so it might be
functionality that's still in the pipeline...