Batch API overview

Here's an example of how to use the Batch API, originally introduced in Drupal 6. In this example, you would probably call batch_example() from a form submit handler, where the form submission provided the $options you want to use to update the nodes.

Here is a sketch to understand the mechanism of Batch API : 

PS! This is only an example. Don't forget to actually read the API documentation.

/**
 * The $batch can include the following values. Only 'operations'
 * and 'finished' are required, all others will be set to default values.
 *
 * @param operations
 *   An array of callbacks and arguments for the callbacks.
 *   There can be one callback called one time, one callback
 *   called repeatedly with different arguments, different
 *   callbacks with the same arguments, one callback with no
 *   arguments, etc. (Use an empty array if you want to pass 
 *   no arguments.)
 *
 * @param finished
 *   A callback to be used when the batch finishes.
 *
 * @param title
 *   A title to be displayed to the end user when the batch starts. The default is 'Processing'.
 *
 * @param init_message
 *   An initial message to be displayed to the end user when the batch starts.
 *
 * @param progress_message
 *   A progress message for the end user. Placeholders are available.
 *   Placeholders note the progression by operation, i.e. if there are
 *   2 operations, the message will look like:
 *    'Processed 1 out of 2.'
 *    'Processed 2 out of 2.'
 *   Placeholders include:
 *     @current, @remaining, @total and @percentage
 *
 * @param error_message
 *   The error message that will be displayed to the end user if the batch
 *   fails.
 *
 * @param file
 *   Path to file containing the callbacks declared above. Always needed when
 *   the callbacks are not in a .module file.
 *
 */
function batch_example($options1, $options2, $options3, $options4) {
  $batch = array(
    'operations' => array(
      array('batch_example_process', array($options1, $options2)),
      array('batch_example_process', array($options3, $options4)),
      ),
    'finished' => 'batch_example_finished',
    'title' => t('Processing Example Batch'),
    'init_message' => t('Example Batch is starting.'),
    'progress_message' => t('Processed @current out of @total.'),
    'error_message' => t('Example Batch has encountered an error.'),
    'file' => drupal_get_path('module', 'batch_example') . '/batch_example.inc',
  );
  batch_set($batch);

  // If this function was called from a form submit handler, stop here,
  // FAPI will handle calling batch_process().

  // If not called from a submit handler, add the following,
  // noting the url the user should be sent to once the batch
  // is finished.
  // IMPORTANT: 
  // If you set a blank parameter, the batch_process() will cause an infinite loop

  batch_process('node/1');
}

/**
 * Batch Operation Callback
 *
 * Each batch operation callback will iterate over and over until
 * $context['finished'] is set to 1. After each pass, batch.inc will
 * check its timer and see if it is time for a new http request,
 * i.e. when more than 1 minute has elapsed since the last request.
 * Note that $context['finished'] is set to 1 on entry - a single pass 
 * operation is assumed by default.
 *
 * An entire batch that processes very quickly might only need a single
 * http request even if it iterates through the callback several times,
 * while slower processes might initiate a new http request on every
 * iteration of the callback.
 *
 * This means you should set your processing up to do in each iteration
 * only as much as you can do without a php timeout, then let batch.inc
 * decide if it needs to make a fresh http request.
 *
 * @param options1, options2
 *   If any arguments were sent to the operations callback, they
 *   will be the first arguments available to the callback.
 *
 * @param context
 *   $context is an array that will contain information about the
 *   status of the batch. The values in $context will retain their
 *   values as the batch progresses.
 *
 * @param $context['sandbox']
 *   Use the $context['sandbox'] rather than $_SESSION to store the
 *   information needed to track information between successive calls to
 *   the current operation. If you need to pass values to the next operation
 *   use $context['results'].
 *
 *   The values in the sandbox will be stored and updated in the database
 *   between http requests until the batch finishes processing. This will
 *   avoid problems if the user navigates away from the page before the
 *   batch finishes.
 *
 * @param $context['results']
 *   The array of results gathered so far by the batch processing. This
 *   array is highly useful for passing data between operations. After all
 *   operations have finished, these results may be referenced to display
 *   information to the end-user, such as how many total items were
 *   processed.
 *
 * @param $context['message']
 *   A text message displayed in the progress page.
 *
 * @param $context['finished']
 *   A float number between 0 and 1 informing the processing engine
 *   of the completion level for the operation.
 *
 *   1 (or no value explicitly set) means the operation is finished
 *   and the batch processing can continue to the next operation.
 *
 *   Batch API resets this to 1 each time the operation callback is called.
 */
function batch_example_process($options1, $options2, &$context) {
  if (!isset($context['sandbox']['progress'])) {
    $context['sandbox']['progress'] = 0;
    $context['sandbox']['current_node'] = 0;
    $context['sandbox']['max'] = db_query('SELECT COUNT(DISTINCT nid) FROM {node}')->fetchField();
  }

  // For this example, we decide that we can safely process
  // 5 nodes at a time without a timeout.
  $limit = 5;

  // With each pass through the callback, retrieve the next group of nids.
  $result = db_query_range("SELECT nid FROM {node} WHERE nid > %d ORDER BY nid ASC", 
  $context['sandbox']['current_node'], $limit);

  foreach ($result as $row) {
    // Here we actually perform our processing on the current node.
    $node = node_load($row->nid, NULL, TRUE);
    $node->value1 = $options1;
    $node->value2 = $options2;
    node_save($node);

    // Store some result for post-processing in the finished callback.
    $context['results'][] = check_plain($node->title);

    // Update our progress information.
    $context['sandbox']['progress']++;
    $context['sandbox']['current_node'] = $node->nid;
    $context['message'] = t('Now processing Batch API overview', array('Batch API overview' => $node->title));
  }

  // Inform the batch engine that we are not finished,
  // and provide an estimation of the completion level we reached.
  if ($context['sandbox']['progress'] != $context['sandbox']['max']) {
    $context['finished'] = $context['sandbox']['progress'] / $context['sandbox']['max'];
  }
}

/**
 * Batch 'finished' callback
 */
function batch_example_finished($success, $results, $operations) {
  if ($success) {
    // Here we do something meaningful with the results.
    $message = t('@count items successfully processed:', array('@count' => count($results)));
    // $message .= theme('item_list', $results);  // D6 syntax
    $message .= theme('item_list', array('items' => $results));
    drupal_set_message($message);
  }
  else {
    // An error occurred.
    // $operations contains the operations that remained unprocessed.
    $error_operation = reset($operations);
    $message = t('An error occurred while processing %error_operation with arguments: @arguments', array('%error_operation' => $error_operation[0], '@arguments' => print_r($error_operation[1], TRUE)));
    drupal_set_message($message, 'error');
  }
  
}

Another example that might be of interest is GiantRobot / csvimport which uses file upload and Batch API to parse a CSV file line by line.