Does db_query and db_insert escape input values? prevent sql injection?
these functions are abstractions on top of php's PDO library. They are essentially prepared sql statements ... passed values to the query are safe from SQL-injection.

Feel free to jump into the PHP PDO Manual.

EDIT:

eg,


  Many of the more mature databases support the concept of prepared
  statements. What are they? They can be thought of as a kind of
  compiled template for the SQL that an application wants to run, that
  can be customized using variable parameters. Prepared statements offer
  two major benefits:
  
  The query only needs to be parsed (or prepared) once, but can be
  executed multiple times with the same or different parameters. When
  the query is prepared, the database will analyze, compile and optimize
  its plan for executing the query. For complex queries this process can
  take up enough time that it will noticeably slow down an application
  if there is a need to repeat the same query many times with different
  parameters. By using a prepared statement the application avoids
  repeating the analyze/compile/optimize cycle. This means that prepared
  statements use fewer resources and thus run faster.
  
  The parameters to
  prepared statements don't need to be quoted; the driver automatically
  handles this. If an application exclusively uses prepared statements,
  the developer can be sure that no SQL injection will occur (however,
  if other portions of the query are being built up with unescaped
  input, SQL injection is still possible).