Thanks for your replies Cetin :)

I was referring to the functions fbtos() and the function that
would have used the return string below:
RETURN "'" + TRANSFORM(dtoc(m.tdDate,1), "@R 9999/99/99")

Both returns string value representing dates as : '9999/99/99'

However i've found out the culprit. Firebird do accept date as '01/01/2005',
but i've overlook other possible causes for the error. I've discovered through
trial-and-error that the cause of the error is that firebird gets confused
when the field name is date.
?sqlexec(nHandle,"insert into table1 (date) values ('01/01/2005')")
returns -1
but
?sqlexec(nHandle,"insert into table1 (tdate) values ('01/01/2005')")
returns 1
who would have thought? it's quite queer for firebird to get confused with
such an often-used field. I've just tried SQL Server 2005 Express and all works just fine..

Thanks again for your inputs