A minimal working example of an alphabetically sorted bibliography (compatible with bibtex) that stops working once the babel package is included.

mwe.tex

\documentclass{scrlttr2}

%% These two lines will break everything:
% \usepackage[english,german]{babel}
% \selectlanguage{english}

%% Some of the following taken from
%% http://tex.stackexchange.com/questions/18033/using-bibtex-with-letter-class
\makeatletter
\newenvironment{thebibliography}[1]
{\list{\@biblabel{\@Alph\c@enumiv}}%  LATIN LETTERS AS REFERENCES
  {\settowidth\labelwidth{\@biblabel{#1}}%
    \leftmargin\labelwidth
    \advance\leftmargin\labelsep
    \usecounter{enumiv}%
    \let\p@enumiv\@empty
    \renewcommand\theenumiv{\@Alph\c@enumiv}}% SAME HERE
  \sloppy
  \clubpenalty4000
  \@clubpenalty \clubpenalty
  \widowpenalty4000%
  \sfcode`\.\@m}
{\def\@noitemerr
  {\@latex@warning{Empty `thebibliography' environment}}%
  \endlist}
\newcommand\newblock{\hskip .11em\@plus.33em\@minus.07em}
\let\bibsection\relax
\def\section*#1{\relax}
\def\@citex[#1]#2{\leavevmode 
  \let \@citea \@empty \@cite {%
    \@for \@citeb :=#2\do {%
      \@citea \def \@citea {,\penalty \@m \ }%
      \edef \@citeb {\expandafter \@firstofone \@citeb \@empty }%
      \if@filesw \immediate \write \@auxout {\string \citation {\@citeb }}\fi%
      \@ifundefined {b@\@citeb }%
      {\hbox {\reset@font \bfseries ?}\G@refundefinedtrue \@latex@warning {Citation `\@citeb ' on page \thepage \space undefined}}%
      {\@cite@ofmt {\expandafter\@Alph\csname b@\@citeb \endcsname }}%
    }%
  }%
  {#1}%
}
\makeatother

\bibliographystyle{unsrt}
\begin{document}
\begin{letter}{TeX.SE}

  \opening{Hello,}

  When writing scientific reports I like to refer to the references in
  the main document using the citation style that has been used
  there. Sometimes I need to mention additional references, and for
  those I like to use capital latin characters to number them. Of
  course I rely on Bib\TeX\ when writing reports. 

  Thus, I like to cite \cite{test1} and \cite{test2} separately, but
  also \cite{test1,test2}. This all works just fine, as long as I do
  not include the babel package.

  How can I make commands defined above more robust?

  \vspace{2cm}
  \noindent References:

  \begin{thebibliography}{A}
  \bibitem{test1} First reference.
  \bibitem{test2} Second reference.
  \end{thebibliography}

\end{letter}
\end{document}