Holding down the left cursor, up cursor and space bar at the same time. My keyboard only recognizes the first two keys pressed. It took me a while to realize this because for a good hour I was debugging expecting to find a bug, first in my code, then in libraries I was using and so on. The confusing thing was that holding down the right cursor, up cursor and space bar worked fine.

It was only later that I tried another keyboard and it didn't work either that I realized it must be a hardware limitation of keyboards or the operating system. I then found this as a kind of confirmation:

http://answers.unity3d.com/questions/162207/why-cant-i-firing-a-bullet-when-holding-down-left.html

This raises questions to me some of which are

1. Is it common knowledge in game development that certain key combinations like cursors and spacebar should be avoided?
2. I vaguely recall playing a lot of games in the past that had cursor key movement and space bar to shoot (I don't recall any specific example though). Does anyone else remember that too? If so how did those games reliably work?
3. How can anyone (but most importantly me) make a keyboard movement controlled game that allows more than two keys to be held down at the same time if there's no guarantee keyboards will support it? To (some) players - with certain keyboards - it will just appear that the game has a crippling bug. In my case what I saw was that when flying forward and firing I couldn't turn the ship left, but turning right was fine.

Since it's a hardware limitation, one way to go around that problem is to allow the player to customize key bindings. That way, if my keyboard can't accept key A and key B at the same time, I'll just change the keys until I'm satisfied with it.

Yes, this is of common knowledge, with some keyboards you can't do certain key combinations. It's not that space+up+left is "the" combination with problems or that more than 2 at the same time is impossible, some keyboards have troubles with that, some others have troubles with other. It's easier to find this problems in cheaper keyboards, and something similar may also happen with some gamepads too (a key is registered when pressing a combination that doesn't contain that key).

Check this: http://en.wikipedia.org/wiki/Rollover_%28key%29

And this: http://www.microsoft.com/appliedsciences/antighostingexplained.mspx

There's no way to be sure that your button layout will work for everyone, so as suggested you should let the player change them.

Also, most keyboards I had make a "beep" sound when a combination doesn't work and I think it happens to everyone, so the user will know it's not just a fault in the game. At least that's how I found out years ago that some combinations are impossible with certain keyboards, I didn't blame the games.