As
grendizer said SPACE bar works as a toggle between
Pause/Play/Pause/and-so-on (not
Play/Pause if you understand what I mean, note that the two functions are inverted).
But you can't use it to enable playback (Play) and then toggle between Play/Pause/Play/and-so-on.
If you want to modify your keyboard definitions press CTRL+P and the Preferences window will appear. Go to "Key definitions & WinLIRC" section and scroll for the action you want to modify (you have to do this both for Windowed and Full screen tabs) and as first/second field set the keyboard shortcut you prefer
