Mac Specs: 17" MacBook Pro, 2.5 GHz Intel Core 2 Duo Processor, 2 GB 667 MHz DDR2 SDRAM, not unibody
I use a MIDI keyboard on GarageBand '08 and it works fine.
In GarageBand, go into your Preferences and click on "Audio/MIDI". While the keyboard is plugged in and turned on and everything, you should select MIDI from the audio input.
I am not right next to my MIDI keyboard so I'm not sure if this is exactly right, as I can't plug it in right now.
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2+2=5 (for extremely large values of 2)
17" MacBook Pro, OSX 10.6.0 Snow Leopard
Also be sure to check the signal paths in your Core Audio MIDI setup. You'll find that here: Applications<Utilities<Audio MIDI Setup.
Click the "MIDI Devices" tab and you'll see a graphic representation of the MIDI mapping within your computer. The "IAC Driver" is the internal device that your computer uses to understand MIDI messages. Click the "Add Device" button and skim through the list to select your particular keyboard. If you don't see it, you can add it yourself.
The arrows on the device denote the MIDI "in" and "out" and if you're not using an external interface, you don't need to do anything. If you are using an interface, add that device and drag a line from the keyboard "in" and "out" arrows to the interface.