Behavior of parameter holders in query containing a '$1'

Hi,

1) I'm reading the API documentation and I'm wondering how the client library would handle the following statement

INSERT INTO test (value1, value2) VALUES ('$1', $1)

Would it handle it incorrectly and would think that '$1' is the parameter or would it skip it because it know that it's
astring value encapsulated in ''? 

2) Can $1 be used more then one times for example if you want to use the same value for multiple column value?
UPDATE test set value1=$1,value2=$1

Thanks,

Eddy