How to tab between buttons on an Mac OS X dialog box

If you enable Full Keyboard Access by setting it to all controls, you should be able to tab between options and select by hitting spacebar, at least for OS X 10.5:

"In Keyboard preferences under Keyboard Shortcuts

Full Keyboard Access:
Switch to All Controls instead of Text Boxes and Lists Only"

When browsing with Safari, you can also tab between all HTML elements on the page using Option+Tab (otherwise Tab would only stop on the browser toolbar controls and quick bookmarks)

"In macOS Catalina, do the following.
In Settings Preferences, navigate to System Preferences > Keyboard > Shortcuts. Select Keyboard in the left pane. Tick the Use Keyboard navigation and untick Change the way Tab moves focus options.
Here's the image for reference:
Keyboard Shortcuts preferences window"