AVR-Chat

I would like to interface my Butterfly to a PS/2 keyboard and I have 
a question:
   The Application note on interfacing to a PC keyboard says that one 
of the lines is the +5v line... the Butterfly (mainly it's dataflash 
which I AM using) can't go up to +5v.  Will the keyboard work on +3v, 
or can I power the keyboard from a +5v source and just use a common 
ground between the keyboard and the butterfly (and if I do it that 
way, can the AVR's inputs handle the +5v while it is running at 
+3v)???

Thanks,
Daniel