I am having this problem as well? Can not add an apostrophe to a name entered during registration. Example O'Shea.
I have read every thread on Joomlapolis and on joomla forums on the subject, which goes back several years with no solution as if it just keeps getting ignored? I tried anything I could but this problem still persists!
Everything is up to date as I am using CB version 1.8.1 and Joomla 2.5.6, so I guess that debunks your claim quoted below:
Latest CB 1.7.1 does not have this very old bug to my knowledge.
It seems that this has been a long going issue that has never been resolved with a bunch of finger pointing and no solutions. Your assistance on this issue is much needed and welcomed!