Yes, flat-footed does only apply at the beginning of combat....normally. However, with flick of the wrist, you can catch someone flat-footed after the first round of combat, and also you have a very good chance to beat your opponent's initiative on the first round of combat as an Iajutsu master, since you get dex (which will be high since you'll probably be unarmored and using weapon finesse), improved init (prereq) and cha (which will be high since it's super useful for iajutsu masters) to your init score, making it around 15-20 or so without even really trying all that hard to max it out. Also, you DO still get the damage against rogues who are caught flat footed, they're just slightly tougher to hit since they still get their dex. What's even better is that you also get the extra damage against uncrittable monsters...there is NOTHING that stops the extra damage from being done (except for hold person or something ;-)). I suppose you could dual wield, too, but it always seemed unnecessary/not as cool to me (the idea of someone walking around without a sword out, pulling it out real quick just to cut someone to bits and then sheathing it again before anyone can blink would just be so undeniably cool). And you don't even really need specialization or high magic bonuses or anything, since the vast majority of your damage will be done by iajutsu focus and moving really fast.