I've done this a few times. For me at least, it turns the screen off but continues updating the library until completion. One thing to watch out for though, is if you have a lot of tracks on the SD card the update can crash and you'll need to use the reset switch. I had to split my update in two to get it to work with my thousands of tracks. I.e. I put half of the tracks on the SD card, updated the library, then put the rest on the card and updated again.
good idea, we are working in the new firmware to see if we can accelerate the update speed .