I want to change Command+Space combination to change keyboard layout to a Windows like Alt+Shift but the Lion's keyboard settings does not react when I assign that particular combination. It allows me to change it to a other combinations, however. I assume this is because Alt+Shift is already being used by some other program, but which one? How can I tell that and what can I do to override that setting?
I don't think you can use alt + shift for anything by itself. It is used for all kinds of special characters in combination with a letter key.
How Mac OS X lets you toggle between different international language keyboard layouts
How Mac OS X uses the "Option" key as a "dead key" to enable typing diacriticals for Western European languages in the US keyboard layout.
Here is where a conflict may arise.