Actually, the PDA says “Synchronizing Tasks” (or whatever conduit runs before Backup), but the PC shows “Making backup copies of the PDA’s databases” (or something like that). And indeed, Tasks are already synchronized and the Palm hangs while starting the Backup conduit, and apparently before it gets to copy any database.
A workaround is to disable the Backup conduit: in Palm Desktop, menu Hotsync -> Custom (the Conduit setup) -> Backup -> Change -> select Do nothing and Set as default. This will disable the Backup of your databases, eliminating the problem, and greatly speeding up HotSync times, so it’s a good thing to do in any case. You’re better off using NVBackup to backup your apps anyway.
Another solution is to remove the current backup in your hard drive, deleting (or renaming) %PROGRAMFILES%PalmUSERNAMEBackup. This should allow the Backup conduit to work again, for a while… but Hotsynch will probably remain edgy, freezing/crashing randomly until you do a hard reset and reinstall everything. So again, you’d better disable the lame Backup and go NV!