It's slow because you probably don't do it often. Normally, iTunes would have just updated a previous backup, but when an iPod never gets backed up, it can take a while (especially if it has a lot a stuff on it).
So there isn't really a way to speed it up, unless you skip it entirely.
Also, you don't even need to back it up, since updating doesn't remove anything (unless something goes wrong and you have to restore)