How would you delete all comments using sed from a file(defined with #) with respect to \'#\' being in a string?
This helped out a lot except for the string portion.
Supposing "being in a string" means "occurs between a pair of quotes, either single or double", the question can be rephrased as "remove everything after the first unquoted #". You can define the quoted strings, in turn, as anything between two quotes, excepting backslashed quotes. As a minor refinement, replace the entire line with everything up through just before the first unquoted #.
So we get something like [^\"'#] for the trivial case -- a piece of string which is neither a comment sign, nor a backslash, nor an opening quote. Then we can accept a backslash followed by anything: \\. -- that's not a literal dot, that's a literal backslash, followed by a dot metacharacter which matches any character.
Then we can allow zero or more repetitions of a quoted string. In order to accept either single or double quotes, allow zero or more of each. A quoted string shall be defined as an opening quote, followed by zero or more of either a backslashed arbitrary character, or any character except the closing quote: "\(\\.\|[^\"]\)*" or similarly for single-quoted strings '\(\\.\|[^\']\)*'.
Piecing all of this together, your sed script could look something like this:
s/^\([^\"'#]*\|\\.\|"\(\\.\|[^\"]\)*"\|'\(\\.\|[^\']\)*'\)*\)#.*/\1/
But because it needs to be quoted, and both single and double quotes are included in the string, we need one more additional complication. Recall that the shell allows you to glue together strings like "foo"'bar' gets replaced with foobar -- foo in double quotes, and bar in single quotes. Thus you can include single quotes by putting them in double quotes adjacent to your single-quoted string -- '"foo"'"'" is "foo" in single quotes next to ' in double quotes, thus "foo"'; and "' can be expressed as '"' adjacent to "'". And so a single-quoted string containing both double quotes foo"'bar can be quoted with 'foo"' adjacent to "'bar" or, perhaps more realistically for this case 'foo"' adjacent to "'" adjacent to another single-quoted string 'bar', yielding 'foo'"'"'bar'.
sed 's/^\(\(\\.\|[^\#"'"'"']*\|"\(\\.\|[^\"]\)*"\|'"'"'\(\\.\|[^\'"'"']\)*'"'"'\)*\)#.*/\1/p' file
This was tested on Linux; on other platforms, the sed dialect may be slightly different. For example, you may need to omit the backslashes before the grouping and alteration operators.
Alas, if you may have multi-line quoted strings, this will not work; sed, by design, only examines one input line at a time. You could build a complex script which collects multiple lines into memory, but by then, switching to e.g. Perl starts to make a lot of sense.