Unicode Font for Mac OS X
Nicholas Shanks has been working on the Kedage font and created a version of it compatible with Mac OS X.
Since I too helped out, I take previlege in announcing the release of a first beta version of it. Please tag in your comments if you find any bug.
He has also made available a keyboard layout (Inscript like) allowing you to type in Kannada on Mac OS X.
Please visit the above link for more information.

Keyboard Layouts
Keyboard Layouts go in ~/Library/Keyboard Layouts/ (or in /Library/Keyboard Layouts/, or /Network/Library/Keyboard Layouts/ if you want them to be more widely available) You may need to log out and back in again before it shows up in the International system prefs.

How do I install the keyboard.bundle file?
I'm able to install the font. But how do I install the keyboard layout?