Mkay is slang that is used by most anyone, it is indeed a replacement of "okay" but IS NOT a grammatically correct word. The word was also made very popular by a character in CMT'S animated show, South Park.
made famous by mr. garrison in the south park movie mkay was to take over from saying the word fuck. though it is more commonly used today as a general cooler way of saying ok. it is also used commonly in chat rooms.