I have a shared hosting envirronment, so updating Piwik is sometimes a problem, because of the long time it takes to perform all the necessary tasks. A way this can be solved is by splitting up the update process in different files (update1.php, update2.php, etc…). The files could be called by using AJAX. A positive side effect of this, is that you would be able to put a progressbar on the page, which i think is more user friendly.
Often the timeout is just for working on laaaarge tables. This can’t be really split off in my opinion.
I have the problem with the initial install. I get a blank page and then I have to update piwik manually. Updating tables works very fast.
This is already on the todo list. It unfortunately won’t make it into 1.0.