Have a look at this review:
http://arstechnica.com/apple/2011/11/garageband-for-iphone-8-track-studio-in-you r-pocket/
In particular, we noticed that GarageBand on the iPhone paused much more often to "optimize performance." It seems as though the app renders its applied effects or midi tracks to a temporary audio track instead of trying to generate virtual sounds all on the fly. We noticed this more on the original iPad compared to the dual-core iPad 2 in our previous review. We believe that GarageBand may be using an additional core to do such optimization in the background on A5-powered devices (including the iPhone 4S). The slower the processor, the more often effects and instrument changes will likely trigger this optimization step, so consider that if you want to run it on a 3GS or older iPod touch. The pauses are a minor irritation in our view; they shouldn't get in the way of getting serious work done, though they might be more bothersome to the casual user "playing" with the app.
To avoid the "optimizing" on an older iPod, I'd try to solo tracks and avoid changing instruments while recording tracks. Also, quit all background applications that might still be running. Reset the iPod, before you start working with GarageBand.