Shivdatta: Actually you probably mean

Your expression will replace only one occurrence (the last I believe) because of the wildcards which make it match the whole line.

But I guess what's asked for is really

Single quotes force the strings to be taken literally; no quotes will give you a syntax error for many complex strings. To interpolate a variable into a string, put it in double quotes.

Of course, if you meant the substitution to contain literal single quotes, put them back in.

The "unknown option to s" error happens because the interpolated string contains slashes. Sed has no way to know which slashes were interpolated (this happens in the shell, before sed executes) so you need to use a different separator than the slash. (Fortunately in this case you know there are no percent signs in these variables. It's tougher when you can't know in advance whether or not a particular character could be included in a variable.)