Excellent. That's what it should be set to in the database.
Then, when Zen Cart loads it from the database, the quotes are converted to actual quotes instead of the " and ' representations.
Then, when the template goes to output to the browser, it normally just sends the content directly to the screen. However, in the case of the clickable link to popup, the product name is included as part of the image description, and since the javascript used to prepare the popup link has to use quote marks in its programming code, all the quotes in your product name need to be converted. That's what the addslashes() function in the template does.
Why it's not doing it on your site is a mystery.
I just set up a product using the same name as you've describe, and it works fine using a fresh clean install of v1.3.7
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