Using javascript function inside html form being echoed inside php

If your string is created with ''s, you can print a ' character by escaping it: \', and if it's created with "'s, then you can print it by escaping it to \".

In your situation, however, I wouldn't do either. I'd just end the PHP tag and start it again:

?>
<form id="create_booking_form" onsubmit="return false;">
            <div>Student Name: </div>
            <input id="students_name" type="text" onfocus="emptyElement('status')" onkeyup="restrict('students_name')" maxlength="30">
            <div>Parents Name: </div>
            <input id="parents_name" type="text" onfocus="emptyElement('status')" onkeyup="restrict('parents_name')" maxlength="30">
            <div>Parents Email Address: </div>
            <input id="parents_email" type="text" onfocus="emptyElement('status')" onkeyup="restrict('parents_email')" maxlength="100">
            <div>Booking Time: </div>
            <input id="booking_time" type="text" onfocus="emptyElement('status')" onkeyup="restrict('booking_time')" maxlength="8">
            <div>Comments / Questions: (max 255 characters)</div>
            <input id="comments" type="text" onfocus="emptyElement('status')" onkeyup="restrict('comments')" maxlength="255">
            <div>Password: </div>
            <input id="password" type="password" maxlength="16">
            <br /><br />
            <button id="createbookingbtn" onclick="createbooking()">Submit your booking</button>
            <span id="status"></span>
        </form>
    </div>
</div>
<?php

But what when I want the HTML content to be in a variable?

Just use an output buffer.

ob_start();
?>
    <p>Some HTML</p>
<?php
$html = ob_get_clean();

I would place the javascript in an external file, and have the php place the link to that file instead.

Put a \ in front of the quote to escape:

echo'<form id="create_booking_form" onsubmit="return false;">
                    <div>Student Name: </div>
                    <input id="students_name" type="text" onfocus="emptyElement(\'status\')" onkeyup="restrict(\'students_name\')" maxlength="30">

etc