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I'm still researching what other languages do. MS-Excel matches what
Python currently does. Django uses the python version and then fixes-up
apostrophe errors: 
 title=lambda value: re.sub("([a-z])'([A-Z])", lambda m:
m.group(0).lower(), value.title()). 
It would also be nice to handle hyphenates like "xray" --> "X-ray". 
Am thinking that it would be nice if the user could pass-in an optional
argument to list all desired characters to prevent transitions (such as
apostrophes and hyphens).
A broader solution would be to replace string.capwords() with a more
sophisticated set of rules that generally match what people are really
trying to accomplish with title casing: 
 http://aitech.ac.jp/~ckelly/midi/help/caps.html
 http://search.cpan.org/dist/Text-Capitalize/Capitalize.pm
 "Headline Style" in the Chicago Manual of Style or 
 Associate Pressd Stylebook: 
 
http://grammar.about.com/b/2008/04/11/rules-for-capitalizing-the-words-in-a-title.htm
Any such attempt at a broad solution needs to provide ways for users to
modify the list of exception words and options for quoted text.