This has been a subject of MUCH debate on these forums due to the unclear rules in the book. In the combat section (Touch attacks and flat-footed defense values pg.160), it states in one place that a flat-footed character loses all Dodge and Parry bonuses so their DV is 10. On the next page (in the section called Flat-footed pg.161), it states that you cannot use your Dexterity bonus to DV when flat-footed.
In another section that started on page 159 and rolls over to 160, it discusses Other Modifiers in relation to DV. One section (at the top of page 160), mentions Dodge Bonuses and how any situation that causes a loss of Dex bonus to DV also causes a loss to Dodge Bonuses. This was a reference like seen in DnD3.5 (to Dodge Bonses that is – like the Dodge feat), but many thought this meant the complete loss of your Dodge CLASS Bonus (which was different from the referenced Dodge Bonus on the top of pg. 160).
So – does flat-footed mean a loss of Dex to DV? If so, how about Str to Parry? . . . OR . . . Does flat-footed mean a complete loss of all bonuses (both stat bonuses and class defense bonuses)?
The answer to this question would have a great impact on Sneak Attacks.
Anyway – Mongoose Bob attempted to clarify these rules for us in the RulesMasters section.
Official Answers from Mongoose Bob:
1. Flat-footed means a DV of 10 and you cannot use any bonuses to DV.
2. Sneak Attacks are thus allowed against flat-footed, flanked, unaware, or otherwise helpless opponents.
3. Sneak Attacks may NOT be used with the feint maneuver.
4. Feinting causes a loss of stat bonuses to DV (Dex to Dodge, Str to Parry)
However – Mongoose Bob did say they were still looking this over and have not yet made a final decision they can share with us. He did mention that feinting might also cause a complete loss in Defense Bonuses, yet he has not ruled this as official yet.
----------Warning: Personal opinions below
Things to think about in my opinion
1. I personally do not like flat-footed causing a DV of 10, unless you are also unaware of your opponent. I think you should retain your Class Bonuses to DV (but not stat bonuses - like in DnD 3.x, Star Wars, SpyCraft, Wheel of Time, etc.) if you can see your opponent running right at you ready to chop your head off. What kind of experienced adventurer would simply stand there, completely unmoving, in such a situation? If you did not see them coming however (like if they were to sneak up on you from behind in a true thiefly fashion), then I understand not having time to react. --- I would also allow for a person to be caught flat-footed AND unaware (thus DV=10) if they made proper use of the Striking Cobra feat. Otherwise, I think experienced adventurers will at least make an effort to avoid or block an attack they see coming right at them (however suffering a minor penalty due to stat losses to DV). I just believe this method (ff=loss of stat to defense), as seen in most other d20/OGL games, has been more play-tested.
2. Realize just how deadly a DV of 10 really is. Some like this, but I think it is a bit too much (and I think Conan would not have lasted very long in his adventures vs. the many sorcerers he faced following this rule). You can easily make Touch Attacks and a Finesse Attack, even against very protective armor, is quite easy. Combine this with spells such as Death Touch or the class ability Sneak Attack, and you give a HUGE advantage to those classes.
3. If you allow Feinting (which is the wrong word to use since it is more of a sly diversion rather than a martial “mock-blow” feint) to also cause a complete loss of Defense (DV=10), then this situation gets even worse. Sneak Attacks will potentially then be allowed each round (if a character takes the Improved Feint feat) and the potential damage done (plus adding extras like Crippling Strike, which causes a –2 to Str EACH hit!) becomes way too unbalancing. (Don't forget the Massive Damage Fort. saves on page 171.)
In the end, we will all just have to wait and see what the revised book says regarding these situations. Opinions do differ on this subject. If any of us are unhappy with the results, then I’m sure we will all have our own HOUSE RULES set up in no time. I know I will.
Good luck with your game.