How to go to a directory that has spaces in its name?

"cd 'how are you'

Or,

cd how\ are\ you"

"If you simply want an AppleScript to change it's current working directory, it isn't possible for the entire script as do shell script ""uses a new shell process, so state such as changes to variables and the working directory is not saved from one to the next."" (Source)

do shell script 'cd /PATH/TO/DIRECTORY/; more commands here'

If you want to use AppleScript to open up and change to the directory in Terminal:

tell application ""Terminal""
activate
do script ""cd /PATH/TO/DIRECTORY""
end tell"