I just tested with a Choice column - I rarely use them, preferring to use Lookup columns instead - and it's a simple matter of setting to the value you want. My column is StateColor with choices [Red | Blue | Neutral]. Here's my test script:
$().SPServices({
operation: "UpdateListItems",
async: false,
debug:true,
listName: "States",
ID: 264,
valuepairs: [["StateColor", "Red"]],
completefunc: function (xData, Status) {
alert(xData.responseText);
}
});