I don't believe an AoO can occur in the middle of a swing.
It can. In fact, your AoO can provoke an AoO, which can provoke, etc.
So, be really, really careful if you've got two beings with Supreme Reflexes (IIR the name C).
IE: Lv20 barbarian approaches Lv20 fighter, fighter has a readied action to 5 Foot Step backwards as soon as the barbarian makes his first swing.
Depending on how he approaches, he can't take the full attack action (e.g., if he took a normal move).
If he hadn't moved yet, then he could potentially auto-miss on his first swing, then take a 5' step, and make his remaining attacks.
Elsewise, the barbarian would make his first attack, realize that he wouldn't be able to hit with the others, and then would retroactively decide to not make his full attack, instead making only a single attack, which leaves him with a move action.
SRD said:
Deciding between an Attack or a Full Attack
After your first attack, you can decide to take a move action instead of making your remaining attacks, depending on how the first attack turns out. If you’ve already taken a 5-foot step, you can’t use your move action to move any distance, but you could still use a different kind of move action.
This would make a character invulnerable to one melee combatant (without Reach), allowing for other PCs to take him down during that time. He would be a very effective tank.
For one round. At which point, he gets ignored, and the Barbarian goes off and kills something else.