For what it's worth, when I run (on SQL 2008):
UPDATE AGGE2.Northgale_utf8.dbo.Orders
SET CustomerID = 'ALFKI'
WHERE OrderID = 11100
And then use Profiler to see what happens on the other side, I see:
declare @p1 int
set @p1=6
exec sp_prepexec @p1 output,NULL,N'UPDATE "Northgale_utf8"."dbo"."Orders" set "CustomerID" = N''ALFKI'' WHERE "OrderID"=(11100)'
select @p1
That is, quotes are applied.
If this does not happen in your case, it may be that the OLE DB provider you are using says that it does not support quoted identifiers with UPDATE.