The generation of the product list takes about an hour.
This is grammatically correct and understandable. It is rather formal (you may want to be formal). In conversation, you would be more likely to hear the following from a native speaker.
It takes about an hour to generate the product list.
The generating of the product list takes about an hour.
This is possible and I'm sure most people would understand what you meant. However it isn't idiomatic and, in a sense, is a misuse of the gerund. Far more likely is:
Generating the product list takes about an hour.
Why use the gerund here? Well you have to because, "Generation the product list takes about an hour", doesn't make sense.
If you want a rule, I think I'm safe in saying, "Use the noun if it's available and makes sense. Otherwise consider the gerund."
Let's see if others agree.