Because I would have killed for an actual example when I was doing this, here is the quoting function I'm currently using (as kind of promised in my entry on how to do this in general). It does rc-style filename quoting (put a ' at the front and end and escape every ' with a second '):

char *my_rl_quote(char *text, int m_t, char *qp) {
    char *r, *p, *tp;

    /* The worst case is that every character of
       text needs to be escaped; at that point we
       need 2x its space plus the ' at the start
       and end and a NULL byte. */
    p = r = malloc(strlen(text)*2 + 3);
    if (r == NULL)
        return NULL;

    *p++ = '\'';
    for (tp = text; *tp; tp++) {
        if (*tp == '\'')
            *p++ = '\'';
        *p++ = *tp;
    }
    if (m_t == SINGLE_MATCH)
        *p++ = '\'';
    *p++ = 0;
    return r;
}

(I suppose you could bum the for loop a bit more by making the increment operation be '*p++ = *tp++' and taking out the last line of the loop body. I feel that would make it a little bit too clever.)

You should set up things for Readline as follows:

rl_filename_quoting_function = my_rl_quote;
rl_attempted_completion_function = my_rl_yesquote;

rl_completer_quote_characters = "'";
/* for rc, probably incomplete: */
rl_filename_quote_characters = " `'=[]{}()<>|&\\\t";

my_rl_yesquote is from my entry on how to do this in general.