The first modern discussion I found of this subject was by R. Shlomo Kluger (d. 1869) in a responsum regarding the permissibility of utilizing the German translation of the Torah by Moses Mendelssohn and its accompanying Bi'ur commentary (Responsa Ha-alef Lekha Shlomo, Yoreh De'ah 257). R. Kluger cites R. Yehezkel Landaud who states that the matter depends on each time and place. In the time of Aivu, it was necessary to punish his relatively minor transgression in order to prevent a weakening of the general religious fabric of the community. So, too, in R. Kluger's time, he claimed, it was necessary to avoid certain intellectual pursuits as well as Mendelssohn's German translation of the Torah because it threatened the religious community. To extrapolate a bit more, it would be wrong to cite heretical sources to those who might be tempted to study those sources further and question their own religious beliefs. But to those whom those sources pose no temptation, there is no problem with quoting them.
R. Hizkiyahu de Medini wrote/compiled a daunting encyclopedia of Jewish law titled Sedei Hemed. It is a classic work, even if it is only used by those who have mastered its idiosyncratic format. He corresponded with rabbis throughout the world, and frequently published their correspondence in his encyclopedia. One of these rabbis was R. Yosef Zechariah Stern, who wrote a letter do R. de Medini in which he quoted Moses Mendelssohn. To his surprise, this letter was published in Sedei Hemed, which led to his receiving many letters reprimanding him from citing such an impure source. In his defense, he composed a long letter which R. de Medini published in the addenda to Sedei Hemed (Sedei Hemed, Pe'as Ha-Sadeh, vol. 1 ma'arekhes ha-aleph no. 64). In this letter, R. Stern offers a broad defense of the study of heretical sources as well as their citation, frequently jumping from one topic to another. R. Stern argues that one is only prohibited from learning directly from a heretic but that one is permitted to learn from his writings (I believe the Maharal preceded him with this, but I cannot find the reference right now) because one is better to able to weigh a person's words objectively and not be swayed by his charisma or personal persuasiveness when the words are in writing. He also quotes the Divrei Yirmiyahu who rules similarly. The implication of all this, which he does not state explicitly, is that one may quote heretical sources in writing but not in speech.
[On the usage of Mendelssohn's translation and its accompanying Bi'ur, see most recently Aaron M. Schreiber, "The Hatam Sofer's Nuanced Attitude Towards Secular Learning, Maskilim, and Reformers" in The Torah U-Madda Journal, vol. 11 (2002-2003) pp. 140-140, 163-167).]
In the same era, R. Hayim Sofer, a student but not relative of R. Moshe Sofer (the Hasam Sofer), was asked whether one may quote a Torah insight that one happened to hear from or in the name of a heretic (Mahaneh Hayim, 3:11). He responded that at first he thought it would be permissible but because of the discussion of the Ramban, Rashba, etc. one may not quote the heretic. Rather, one should say that he heard it from or in the name of "someone" without stating the name, so as not to take credit for someone else's insight.
Much more recently, R. Moshe Stern addressed the pressing matter of whether a student may use books written by Zionists or someone associated with Yeshiva University (Responsa Be'er Moshe, 8:3). He concludes that one may not, based on the discussion of the Rashba, etc. and, additionally, because one may not learn Torah from - even from the writings of - a teacher who does not follow the proper path.
Clearly, there are different approaches among the later authorities. According to R. Yosef Zechariah Stern, one may learn and cite heretical sources in writing. According to R. Kluger, it depends on the place and time. It is unclear what R. Sofer holds about material in writing, but he rules based on the Ramban, etc. R. Moshe Stern is strict even about material in writing.
It is interesting, though, that the responsum of R. Amram Gaon that is the basis of the discussion of the Ramban etc. only refers to quoting a wayward scholar in the beis midrash. It is possible that in other places, such as in the college classroom, there would be no implicit respect given to the wayward scholar by quoting him. I do not mean to imply that the location is key but, rather, the venue. Torah study in a beis midrash is a religious exercise. Academic study is not. Perhaps the citation of wayward scholars is entirely permissible, even according to the strictest authorities, in a non-religious atmosphere.
There is more to say on this subject but since my goal here is not to offer any halakhic ruling, I will stop and simply recommend that anyone interested in this should ask their local rabbi what his position is.
Note that I had intended to put this all together as an article but never found the time to think it through and develop it sufficiently. If you want to do so, feel free but please cite this blog.