Initiative isn't a really good thing to reflect weapon speed - it's not all that critical after first round (when flat-footedness happens), and it doesn't make all that much sense, anyway. I mean, you don't actually react slower when hefting a great ax than when carrying a dagger - you might be slower in getting your first swing off, but not in reacting in other ways (ie, not being flat footed).
I considered doing Weapon Speed by having it affect itterative attacks. I've decided against using it IMC, but, here it is:
Weapon Speed Factor and Reach:
Some weapons are lighter, more agile or ‘wieldy’ than others. To represent this, weapons are given a speed factor, from 3 to 6. Low Speed Factor weapons allow the wielder to strike and recover more quickly and easily, high Speed Factor weapons are more unwieldy, but generally longer, in addition to being more damaging. The 'Speed Factor' doesn't directly affect initiative, rather, it's the divisor to BAB for the number of attacks you get. Thus, for instance, an unarmed character with a BAB of +8, could make a full attack at +8/+5/+2, while the same character armed with a greatsword would make a full attack at +8/+2.
Weapon .................Speed Factor
Tiny/unarmed ................3*
Small/Rapier ................4
Medium ......................5
Large/Bastard Sword/War Ax...6
Double Weapon...............5/5
Modifiers:
Improbable weapon...........+1 (Gnome Hooked Hammer, Double Sword)
Impractical weapon..........+2 (Dire Flail, Spiked Chain, Bladed Gauntlet)
Absurd weapon...............+4 (Mercurial Greatsword, Gyre-Spike)
Finessed Weapon .............-1 (min 3).
Monk* wielding a special Monk weapon
   (Kama, Nunchaku, Siangham)... -1 (min 3).
Large Creature, unarmed......4
Huge Creature, unarmed.......5
Gigantic Creature, unarmed.......6
Colossal Creature, unarmed.......7
Speed Factor is used as the divisor for iterative attacks. Thus, a human or smaller creature attacking unarmed with a BAB of 6 gets +6/+3 attacks, while the same character with a Rapier makes +6/+2, with a longsword +6/+1, and with a Greatsword only one attack at +6.
The flip side of a smaller, faster weapon is that it’s generally shorter. Thus, larger weapons, even if they don’t have Reach, do have a reach advantage over smaller ones. When a character armed with a weapon one size-category smaller than his opponent’s first engages (enters melee) he provokes an attack of opportunity. This only occurs on the initial engagement. On subsequent rounds, as long as neither character takes more than a 5’ step away from the other, no additional AoOs are provoked by the wielder of the smaller weapon. If an attacker is armed with a weapon two or more size-classes smaller than the defender, he provokes an Attack of Opportunity every round that he threatens the defender, as he tries to get inside the guard of the defender long enough to make a credible attack. The wielder of the smaller weapon can choose not to threaten an adjacent defender on a given round, if he wishes.
*Since the BAB divisor of 3 is available to anyone using a light enough weapon, Monkish BAB can be allowed to stack normally.
Feats:
Spring Attack: Spring Attack negates the AoO provoked by threatening or engaging with a smaller weapon.
Mobility: Mobility adds it’s +4 Dodge Bonus to AC vs an AoO provoked by initially engaging while armed with a smaller weapon than your opponent. It does not help with the AoO provoked by threatening an opponent with a weapon two size-classes smaller than his own.
Improved Unarmed Strike: Improved Unarmed Strike negates the AoO for attacking unarmed (as normal) and the AoO for threatening an opponent armed with a weapon two size-classes greater (medium weapon vs a medium unarmed attacker, for instance) under this system. It does not negate the AoO for initial engagement, however.
Weapon Specialization: Weapon Specialization reduces the Speed Factor of the weapon by 1, to a minimum of 3.
Weapon Speed [General, Fighter]
   You have trained exhaustively with your weapon of choice and can strike and recover with it faster than normal.
   Prerequisites: Dex 13+ (same size or smaller weapon) or STR 13+ (same size or larger weapon) , Weapon Focus, BAB 4+
   Benefits: Pick one weapon. That weapon’s Speed Factor is reduced by one, to a minimum of 3, for purposes of determining your iterative attacks when you fight with it in melee.
   Special: Weapon Speed and Weapon Specialization stack, but the minimum Speed Factor for any weapon wielded by any character is still 3. You may take this Feat multiple times, each time you do, it applies to a different weapon.
