I've bumped into a "time out" during a WordPress or plug-in upgrade, and I assume that many people have encountered this to some degree. Sometime, it's easy to fix the time-out limit in PHP, sometime it's not possible because the hosting company doesn't allow it.
The BackupBuddy folks have integrated a "keep-alive" function in their WP plug-in that prevents the page from timing out. It works great.
I was wondering if the WordPress core team has something like this planned.