How to disable the Option-Space key combination for non-breaking spaces?

Make your ~/Library/KeyBindings/DefaultKeyBinding.dict file look like this (if it doesn’t exist create it, if there are already bindings in it just add the one from below):

{
"~ " = ("insertText:", " ");
}

What does this do? Every time you press Option-Space instead of inserting a non breaking space OS X now inserts a regular space. Problem fixed.

You need restart the device to apply this change.

As mentioned in the comments, the solution provided by Martin does not work in some applications, most importantly (for me) in my editor, Sublime Text 2.

So for all of you who are troubled by none breaking spaces in your code, you can add the following custom keybinding into your user keymap ("Sublime Text 2 > Preferences > Key Bindings - User"):

{ "keys": ["alt+space"], "command": "insert_snippet", "args": {"contents": " " } }

This will insert a regular space instead of a non-breaking one.

I use iTerm2 for most of my work and the mapping can be added in the "Keys" preference pane, by adding a new key combination in Preferences -> Keys -> the plus button. Note when adding the key make sure to put a single space in the lower box as shown.