Uuup, I'm quite new to this issue tracking tool, so I not even entered a headline :-(
Please forgive me.

Are you adding a panel containing focusable widgets to the ModalDialog? The current
impl does not scan panels for focusable children. You have to manually add the
panel's children to the focus model (see example below). Please comment if you feel
it should work differently. 

final Button focusManagementDialog = new Button("Focus management");
focusManagementDialog.addClickListener(new ClickListener()
{
  public void onClick(Widget sender)
  {
    final ModalDialog dialog = new ModalDialog();
    dialog.setCaption("Register", false);
    FocusModel fModel = dialog.getFocusModel();
    
    final int FIELD_COUNT = 3;
    Grid table = new Grid(FIELD_COUNT, 2);
    dialog.add(table);
    Widget[] labels = new Widget[FIELD_COUNT];
    labels[0] = new Label("User name: ");
    labels[1] = new Label("Password: ");
    labels[2] = new Label("Retype password: ");
    
    FocusWidget[] fields = new FocusWidget[FIELD_COUNT];
    fields[0] = new TextBox();
    fields[1] = new PasswordTextBox();
    fields[2] = new PasswordTextBox();
    
    CellFormatter formatter = table.getCellFormatter();
    for (int i = 0; i < labels.length; i++)
    {
      table.setWidget(i, 0, labels[i]);
      formatter.setHorizontalAlignment(i, 0, HasHorizontalAlignment.ALIGN_LEFT);
      table.setWidget(i, 1, fields[i]);
      fModel.add(fields[i]);
    }
    fModel.setFocusWidget(fields[0]);
    
    ColumnPanel buttonPanel = new ColumnPanel();
    buttonPanel.setWidth("100%");
    dialog.add(buttonPanel);
    
    Button closeButton = new CloseButton(dialog, "Register!");
    fModel.add(closeButton);
    buttonPanel.add(closeButton);
    
    Button cancelButton = new CloseButton(dialog, "Cancel");
    fModel.add(cancelButton);
    buttonPanel.addWidget(cancelButton, false);
    buttonPanel.setCellHorizontalAlignment(ColumnPanel.ALIGN_RIGHT);
    
    dialog.show(focusManagementDialog);
  }
});
panel.add(focusManagementDialog);