Originally Posted by
EinarMal
This is actually incorrect according to the official 3.5 FAQ which states you can use flurry and TWF with unarmed attacks.
To add an off-hand attack to a flurry of blows, stack
whatever two-weapon penalty the monk has with the penalty (if
any) from the flurry. Attacks from the flurry have the monk’s
full damage bonus from Strength, but the off-hand attack gains
only half Strength bonus to damage. If the off-hand attack is a
weapon, that weapon isn’t available for use in the flurry (if it
can be used in a flurry at all, see the previous question). For
example, a 4th-level monk with the Two-Weapon Fighting feat
and a Strength score of 14 decides to use a flurry of blows and
decides to throw in an off-hand attack as well. The monk has a
base attack bonus of +3 and a +2 Strength bonus. With a flurry,
the character can make two attacks, each at +3 (base +3, –2
flurry, +2 Strength). An unarmed strike is a light weapon, so
the monk suffers an additional –2 penalty for both the flurry
and the off-hand attack, and the monk makes three attacks,
each at an attack bonus of +1. The two attacks from the flurry
are primary attacks and add the monk’s full Strength bonus to
damage of +2. The single off-hand attack adds half the monk’s
Strength bonus to damage (+1).
If the monk in our example has two sais to use with the
flurry, plus the off-hand attack, she can use both in the flurry
(in which case she must make the off-hand attack with an
unarmed strike) or one sai for the off-hand attack and one with
the flurry. The sai used in the off-hand attack is not available
for the flurry and vice versa.