Here are two suggestions for speeding up the assignment of values to sparse matrices:
1) Using SPALLOC, specify the number of nonzero elements that the sparse matrix will have. This will allow you to specify how much space should be allocated. If you know that you will be assigning new values, you can specify more space than you initially use. This way, MATLAB will not need to reallocate extra memory later.
2) If you are creating a sparse vector, use a column vector instead of a row vector. MATLAB needs to keep track of every column of the sparse matrix, so if you use a column vector instead of a row vector, then it will only need to keep track of a single column, which will save memory and processing time.