http://www.darryl.com/badges/

Actually there is a whole web page devoted to the line "We don't need no stinking badges." They confirm or refute the stinking badge reference and if valid provide a verbatim quote. From the Treasure of the Sierra Madre they offer

"Badges? We ain't got no badges. We don't need no badges. I don't have to show you any stinking badges!"

BTW the link provided by WON (greatest film misquotes) is chock full of pop-up windows.