The library rules for title case are even more complicated than that. I learned that you capitalize the first and last words, even if they ARE prepositions or articles. You're right in that the edge cases like apostrophes and multiple capitals (e.g., "McDonald's") are annoyingly complicated to get right.
For my website, I have a "turn filenames into titles" function. For example, a-sunrise-to-remember.jpg becomes "A Sunrise to Remember" which uses a small canned list of the most common prepositions and articles (including a few in Spanish). Every once in a while, I find I have to add yet another special case.
[ e d @ h a l l e y . c c ]
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