[unix] how does unix handle full path name with space and arguments?

You can quote if you like, or you can escape the spaces with a preceding \, but most UNIX paths (Mac OS X aside) don't have spaces in them.

/Applications/Image\ Capture.app/Contents/MacOS/Image\ Capture

"/Applications/Image Capture.app/Contents/MacOS/Image Capture"

/Applications/"Image Capture.app"/Contents/MacOS/"Image Capture"

All refer to the same executable under Mac OS X.

I'm not sure what you mean about recognizing a path - if any of the above paths are passed as a parameter to a program the shell will put the entire string in one variable - you don't have to parse multiple arguments to get the entire path.