Use aspas simples para criar a string literal:
echo '<project name="Grace5921/device_samsung_kyleve" path=\
"device/samsung/kyleve" revision="cm11" remote="github"/>' >>kyleve.xml
Ou escape das aspas duplas relevantes com \
:
echo "<project name=\"Grace5921/device_samsung_kyleve\" \
path=\"device/samsung/kyleve\" revision=\"cm11\" remote=\"github\"/>" >>kyleve.xml