I don't see why not (not a definitive answer). It does make high level rogue "samurai" iadoists far more lethal.
I'm working on a scorpion samurai using Bayushi's Technique and Skill Focus: Iaijutsu Focus, Improved Initiative and a few other things to be a "one hit, fast kill" kinda guy, working into the Iaijutsu Master PrC.
Bear in mind the distinctive differences between sneak attack and iaijutsu focus.
Sneak attack is whenever the opponent is flanked or denied his dex bonus.
Iaijutsu focus is whenever the opponent is flatfooted.
Thus an attack on a flatfooted opponent would stack the sneak attack damage with anything from iaijutsu focus, but at any other time the iaijutsu focus doesn't come into it.
If attacking a flatfooted Rogue or Barbarian with uncanny dodge, you get the iaijutsu focus (since they are still flatfooted) but not the sneak attack (since their uncanny dodge means they keep their dex bonus).
just to clarify, it's also "immediately after drawing a melee weapon", so it's really only meant to be used at the begining (or before the begining) of a battle. i believe this is why they added the bit about martial artists using it to destroy objects, but only if they have no distractions (otherwise, an unarmed martial artist could use it for every attack, since they don't have to draw their weapon)
I own and play OA, and can say that Plane Sailing is correct. Iaijutsu Focus is very nasty and can occur outside of an iaijutsu duel.
Some common feat combinations to maximize effectiveness:
Way of the Scorpion (Rokugan) Get Int and Dex mod to dex
A Single Moment (Rokugan) Refocus as MEA
Improved Feint (Evil Handbook) Feint as MEA w/ +4 bonus
Ultimate Feint (Evil Handbook) Feint as free action
Expert Tactician (S&F)
Expert Timing (Kingdoms of Kalamar) Basically, lets you count as having a readied action each round. You can act without changing your initiative.
Quickstrike (Traps & Treachery) If target is damaged by a sneak attack, you get additional attack at same bonus 1/round
And the worst feat: Versatile (Rokugan) Choose two cross-class skills; these class skills are always considered class skills no matter what class you take.
I would put pre-requisites in here but that would be a copyright violation. Have fun building your super rogue/...
If you have any further questions, I'll keep up with this thread.