Backticks have been deprecated for a long time. They offer no advantage over $( ... ) and have quoting nesting and escaping issues.

Unless you are writing for a legacy shell like pre-Posix Bourne shell, use $( ... ) instead. I never use them.

Unless you need further line level processing in shell, you could of course use:

Code:

sed 's|/|\\/|g' << "here"
...
here

If you need the line processing in a loop, calling an external program with each iteration is expensive..
If you use bash, ksh93 or zsh as a shell you could use something like this (parameter expansion):

Code:

while read LINE
do
  escaped=${LINE//\//\\/} 
  echo "$escaped"
done << "here"
...
here

-or-

Feed the sed output into a loop (and use read's -r option):

Code:

{
  sed 's|/|\\/|g' << "here"
...
here
} |
while read -r LINE
do
  echo "processing ${LINE}"
done

--
Note: as was suggested a different delimiter removes the need for the escape for the forward slash, which makes the code more readable. In the examples given there was one escape too many:

Code:

sed 's|/|\\/|g'

Also, to prevent headaches, it is recommended to quote variable expansions, so use:

Code:

echo "$escaped"

or better yet:

Code:

printf "%s\n" "$escaped"