How to say 'No' to your boss (like a boss)

Never be afraid to say no. But with that no, you are required to know your shit. What is the law, the regulation, or policy? What are the alternative courses of action? More importantly, since this is posted in the IT group, what is the requirement and does the boss' desired solution actually meet that requirements in a safe, secure and economically feasible manner? In the end however, has the mission requirement been weighed against the issues with the requirement? I have had to personally approve the introduction of unapproved software on a network due to the uniqueness and time sensitivity of a mission. On one occasion my decision enabled the communications for US SOF coordinating efforts with Columbian SOF to facilitate a rescue operation of three Americans. Common sense factor is required from both the boss and those who intend to tell him or her no.