How can I escape white space in a bash loop list?

First, don't do it that way. The best approach is to use find -exec properly:

# this is safe
find test -type d -exec echo '{}' +

The other safe approach is to use NUL-terminated list, though this requires that your find support -print0:

# this is safe
while IFS= read -r -d '' n; do
  printf '%q\n' "$n"
done < <(find test -mindepth 1 -type d -print0)

You can also populate an array from find, and pass that array later:

# this is safe
declare -a myarray
while IFS= read -r -d '' n; do
  myarray+=( "$n" )
done < <(find test -mindepth 1 -type d -print0)
printf '%q\n' "${myarray[@]}" # printf is an example; use it however you want

If your find doesn't support -print0, your result is then unsafe -- the below will not behave as desired if files exist containing newlines in their names (which, yes, is legal):

# this is unsafe
while IFS= read -r n; do
  printf '%q\n' "$n"
done < <(find test -mindepth 1 -type d)

If one isn't going to use one of the above, a third approach (less efficient in terms of both time and memory usage, as it reads the entire output of the subprocess before doing word-splitting) is to use an IFS variable which doesn't contain the space character. Turn off globbing (set -f) to prevent strings containing glob characters such as [], * or ? from being expanded:

# this is unsafe (but less unsafe than it would be without the following precautions)
(
 IFS=$'\n' # split only on newlines
 set -f    # disable globbing
 for n in $(find test -mindepth 1 -type d); do
   printf '%q\n' "$n"
 done
)

Finally, for the command-line parameter case, you should be using arrays if your shell supports them (i.e. it's ksh, bash or zsh):

# this is safe
for d in "$@"; do
  printf '%s\n' "$d"
done

will maintain separation. Note that the quoting (and the use of $@ rather than $*) is important. Arrays can be populated in other ways as well, such as glob expressions:

# this is safe
entries=( test/* )
for d in "${entries[@]}"; do
  printf '%s\n' "$d"
done

find . -type d | while read file; do echo $file; done

However, doesn't work if the file-name contains newlines. The above is the only solution i know of when you actually want to have the directory name in a variable. If you just want to execute some command, use xargs.

find . -type d -print0 | xargs -0 echo 'The directory is: '

This is exceedingly tricky in standard Unix, and most solutions run foul of newlines or some other character. However, if you are using the GNU tool set, then you can exploit the find option -print0 and use xargs with the corresponding option -0 (minus-zero). There are two characters that cannot appear in a simple filename; those are slash and NUL '\0'. Obviously, slash appears in pathnames, so the GNU solution of using a NUL '\0' to mark the end of the name is ingenious and fool-proof.

Don't store lists as strings; store them as arrays to avoid all this delimiter confusion. Here's an example script that'll either operate on all subdirectories of test, or the list supplied on its command line:

#!/bin/bash
if [ $# -eq 0 ]; then
        # if no args supplies, build a list of subdirs of test/
        dirlist=() # start with empty list
        for f in test/*; do # for each item in test/ ...
                if [ -d "$f" ]; then # if it's a subdir...
                        dirlist=("${dirlist[@]}" "$f") # add it to the list
                fi
        done
else
        # if args were supplied, copy the list of args into dirlist
        dirlist=("$@")
fi
# now loop through dirlist, operating on each one
for dir in "${dirlist[@]}"; do
        printf "Directory: %s\n" "$dir"
done

Now let's try this out on a test directory with a curve or two thrown in:

$ ls -F test
Baltimore/
Cherry Hill/
Edison/
New York City/
Philadelphia/
this is a dirname with quotes, lfs, escapes: "\''?'?\e\n\d/
this is a file, not a directory
$ ./test.sh 
Directory: test/Baltimore
Directory: test/Cherry Hill
Directory: test/Edison
Directory: test/New York City
Directory: test/Philadelphia
Directory: test/this is a dirname with quotes, lfs, escapes: "\''
'
\e\n\d
$ ./test.sh "Cherry Hill" "New York City"
Directory: Cherry Hill
Directory: New York City

find . -print0|while read -d $'\0' file; do echo "$file"; done

To add to what Jonathan said: use the -print0 option for find in conjunction with xargs as follows:

find test/* -type d -print0 | xargs -0 command

That will execute the command command with the proper arguments; directories with spaces in them will be properly quoted (i.e. they'll be passed in as one argument).

Had to be dealing with whitespaces in pathnames, too. What I finally did was using a recursion and for item in /path/*:

function recursedir {
    local item
    for item in "${1%/}"/*
    do
        if [ -d "$item" ]
        then
            recursedir "$item"
        else
            command
        fi
    done
}

just found out there are some similarities between my question and yours. Aparrently if you want to pass arguments into commands

test.sh "Cherry Hill" "New York City"

to print them out in order

for SOME_ARG in "$@"
do
    echo "$SOME_ARG";
done;

notice the $@ is surrounded by double quotes, some notes here