Try surrounding the value with quotes. As of right now, it's not quoted, so the space is causing the HTML to think the second (or third) part is not part of the value:
Code:
<?php
$count=1;
while($row=mysql_fetch_array($result,MYSQL_NUM)){
$name=$row[1];
echo"<option value='".$name."'>".$name."</option>"; //I put a single quote AFTER the equals sign and before the first > sign
$count++;
}?>
Also, one cool thing about php is that if you are using double quotes in an echo statement, you don't have to break out of it to include variables. PHP will interpret the variables as they are. This only works if you are using double quotes, so this would work as well as what you have:
Code:
echo"<option value='$name'>$name</option>";
This will allow you to see the code a little better.