Right - you can cancel the backup and rebuild will continue.  However it is a good idea to make the backup.

Usually when this happens the problem is that the backup location is no longer accessible.  For instance if you are backing up to a USB stick it may be that the USB stick isn't writeable for some reason.  Or if it is a hard drive the drive may no longer be accessible.

Usually it is enough to unmount the drive and remount it. Sometimes rebooting the computer is necessary.  

The other thing that comes to mind is you may be using a disk (or USB key) that has been formatted using a very old disk format.  Typically this happens with a USB key formatted for MS-DOS (a lot of them ship with MS-DOS formatting as its kind of a least common denominator).  Unfortunately MS-DOS format is too old for the data QuickBooks stores.  You should use HFS+ formatting on drives and USB sticks.

You can reformat either using Apple's Disk Utilities program.  But of course anything currently on the drive will be destroyed.