Larcen: Thanks, the compliment is much appreciated! Though tempers flare and egos trip around here on occasion, for the most part I find these message boards a great source of ideas. I'm glad someone finds a few of my own ideas useful
Tobithus: It would be hard for me to suggest any 'step-by-step' method of representing a real-world martial arts style. To my understanding, there's not really a codified way to break down all aspects of different martial arts styles in a way that correspond's to D&D 3E game mechanics. (Especially given all the special problems presented by the wacky Monk class. I'm a purist, so in my own little world, martial artists would be Fighters.) But I will try to suggest *something*.
Step 1: Decide on the Mechanics
Feats, Feat Trees, or Prestige Classes?
If you go with Prestige Classes, you'll need to come up with some imaginative abilities for the PrC. It also means that your PC's and NPC's will be working towards these classes as a particular goal; it takes planning. Making Prestige Classes to represent different martial arts styles will have the effect of putting the martial arts into the spotlight, center stage. It makes for good OA or 'wuxia' type flavor, where certain styles are famous and well-known, and a contest between practitioners using different styles becomes quite a spectacle.
If you go with feats, the martial arts will be less likely to hog attention. Feats are also easier to write.
I wouldn't advise using skill points to represent skill in martial arts styles, because this favors Rogues and discourages Fighters as martial artists. It's my opinion that there's something not quite right about that.
Step 2: Designing Bonuses
PrCs are more work than feats, but either way, you run into two possible hang-ups: Balance and Flavor.
Balance: Keep an eye on your PrC or feat - try not to make it too over-the-top. A good rule of thumb that inhabits this message board in a general way is the notion "If a PC would be *stupid* not to take this PrC or feat, it's probably too powerful." With feats or, feat chains, look at the prerequisites. If it's a powerful feat, make sure that if a character takes it at low-level, it doesn't automatically make him dominate combat. You may want to make sure that a chain of feats on a high-level character doesn't make him or her a juggernaut of destruction. Try totally maxing out the feats or PrC on a sample character, and see if it makes him/her totally ridiculous. There's at least two good reasons for this, and probably more:
1) A feat chain that's ridiculously good will encourage all your characters to take it, making for a carbon-copy group of PCs. Very boring. Plus, any player who doesn't take the feat chain will be made to feel that his or her character is 'weaker' than the other players in combat, which can discourage roleplaying and player creativity.
2) If an NPC (particularly, a major villain or ally) had these feats and became unstoppable as a result, the players may have less fun also - what the PCs can do, the NPC's can also do.
Lots of stackable bonuses to AC, Attack Bonus, and Damage, particularly, are very dangerous. Anything more than +2 to any of these for free (unlike Power Attack or Expertise, for example) can break the game.
Flavor:
If the bonuses are all of the Armor Class, Attack Bonus, and Damage Bonus variety, there isn't much... well, variety. Standard feats exist to improve these three factors, which are all very basic, very useful, and very obvious parts of combat. A nice place to start is by reading through the chapters on combat in both the PhB and the DMG - look at combat from all sorts of angles - grappling, formation fighting, combat awareness, mobility and positioning - in one of your posts, you noted initiative and grappling, for example. Other possible candidates include teamwork, disarms and trips, damage reduction, weapon mastery, elemental resistance, improved feats, etc. Try to come up with something original and creative - even if it's a little less powerful, players will probably appreciate the different sorts of bonuses, outlining the fact that their characters can do unusual things of which even many of their powerful foes are not capable.
Step 3: Testing
Run it by your players. They'll need to know the House Rules anyway. They may come up with lots of creative things to do with these feats - feedback will help you tweak the rules to your satisfaction - some of them may know a lot about the subject, and help you out with accuracy or suggestions. It also helps avoid potential rules abuse down the line - time wasted arguing over the rules in the middle of combat takes away from total playing time, and makes everything less fun for anyone who's not a rules lawyer. Or so's been my experience.
Also - I don't know how much I can help, because the sports and styles you mention, I'm not familiar with. If you point us to some links or literature, training manuals, movie clips, book recommendations, etc. that could teach us a little about the styles. We may be able to think of a few useful suggestions once we can see the styles in context. If no such literature exists, maybe you could post as much as you know about the style? That would help us work through a conversion.
In any case - this is the way that I would approach it. It's by no means the only way.