So the outdated APE and Leopard issue has promoted the idea that it leads to a “Leopard BSOD”. While I understand the potential confusion, please remember that a BSOD is a full fledged kernel panic when referring to Window’s famous blue screen. The blue you see when Leopard boots is actually drawn by the window server, before loginwindow finishes to start, at which point it will either log you in or draw the login panel and the default background picture.
Because of the way APE works, it’s most likely it’s simply preventing loginwindow from properly starting. Under the covers, the Mac OS X kernel is still “happily” humming along. So it’s not a BSOD as it is generally understood — just a coincidence.
Edit: Mac OS X certainly can kernel panic. But its death screen is not an intimidating blue screen. It’s a nice message telling you to reboot your computer (or a not-too-helpful dump if you passed the kernel certain debug boot flags).