Well the solution to getting my Play/Pause button to actually work as a play/pause toggle was pretty easy.
Amarok supports a playPause() method that is registered to the dcop server so in my hotkeys.conf file the command for the Play button became
dcop amarok player playPause
dcop is the command line based client to talk to the dcop server, amarok is of course the application I want to talk to.
player is the section of the amarok services and playPause is the function/method I want to call.
To find this out I used kdcop the graphical interface and explored what it offered under the amarok application.