WWW:

escape(  	s[, quote])
    Convert the characters "&", "<" and ">" in string s
to HTML-safe sequences. Use this if you need to display
text that might contain such characters in HTML. If the
optional flag quote is true, the double-quote character
(""") is also translated; this helps for inclusion in
an HTML attribute value, as in <A HREF="...">. If the
value to be quoted might include single- or
double-quote characters, or both, consider using the
quoteattr() function in the xml.sax.saxutils module
instead.


pydoc
cgi.escape = escape(s, quote=None)
    Replace special characters '&', '<' and '>' by SGML
entities.


why? ;(

moreover pydoc doesn't even say what quote is!!

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The documentation from pydoc is generated from doc-strings
in the python source. Not only does this limit what you can
do with it (hence the need for more elaborate
documentation), it is also reasonable that this
documentation remains terse. You should consider it more as
a quick reference in stead of full-on documentation. 

I have submitted a small patch (1243910) to include a
comment in the doc-string about quote.

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pterk, thank you

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I expanded the cgi.escape docstring a bit (v 1.84).  In general though, the
online doc can't really be a complete substitute for the reference
documentation.  It should be treated more as a hint for usage.

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Closing, then.
To the OP: If you have any more instances where the
docstring misses crucial information, please open a new report.