The outlined button only works if full keyboard access has been turned on!

In 10.5 the default selection for the blue outlined button was OK. This changed with 10.6 which stupidly now puts the default to the already glowing Cancel button. So in 10.5 all you had to do was to hit the space bar. With 10.6 that changed to TAB, followed by space bar.

So I'm glad that I can avoid this dialog with ALT -> Great hint!

See my comment above: Tab and Space work for me in 10.5.8 even with FKA off.
BTW, the buttons in Leopard are Cancel [default], and Delete. Neither button says “OK”.

Sorry, I'm not using Mac OS in English and wasn't sure about the button's inscription. And I didn't know that it even works without FKA enabled. I will still keep it that way though, because it's handy to select the menu bar, Dock, etc. via keyboard.