I can see the newly installed font "Diwani Letter" in the font list.
So, let's say I change the input menu to Arabic and type something in TextEdit. The text appears in the ugly Arabic-Lucida Grande (Lucida Grande includes about every language there is). As I try to change that by selecting all of my text and choose Diwani Letter form the font menu, some other (japanese, I think) font gets highlighted but the text remains Lucida Grande.
I can scan the font in Key Caps if the input menu's NOT arabic. When being in arabic mode on the other hand - I can only see ArabLucida Grande.
My friend is also on the same OS (Jaguar) but doesn't have the same issue with this font (and other arabic ones, can't bring all of them up).