Even without the Catch off Guard feat you can threaten with IWs. All the feat does is remove the -4 penalty to attackWhich is what I said.
I was agreeing with you.
I think it would be entirely fair to rule that improvised weapons should not be allowed to deal precision damage (ie. sneak attack).Actually I think that rule exists. I know you can't do nonlethal without a Sap and I thought there was a "must be proficient" rule for Sneak Attack and/or precision also. If so, improvised weapons by definition (even with Caught Off-Guard) are still non-proficient.
If you find those rules please post where. I was actually thinking that being nonproficient might prevent you from making AoOs as well but I can't find anything to suggest that and I have not been able to find the rules for nonproficient other than random mentions that you take -4 to attack. Perhaps that is all there is to it.
RAW- "Ranged weapons are thrown weapons or projectile weapons that are not effective in melee."
Improvised Weapons: Sometimes objects not crafted to be weapons nonetheless see use in combat. Because such objects are not designed for this use, any creature that uses an improvised weapon in combat is considered to be nonproficient with it and takes a –4 penalty on attack rolls made with that object.
Those actually seem to complement each other quite well. A crossbow is not effective in melee. Improvised weapons are not crafted to be weapons but nonetheless see use in combat. Because the IW was not made for that use you are nonproficient and suffer -4 to attack. Seems like the perfect fit of problem and solution.
If you want to use a crossbow in melee, it would seem that you need to do something that 'makes it effective in melee' such as announcing your decision to use it as an IW. I personally would say that is something that must be done on your own turn. Seems others would allow that decision to be made in the middle of another persons turn.
I don't see why it "would seem" that way to you. I see no RAW to suggest that. So:
1) Show where announcing your decision beforehand is required.
2) Show where announcing your decision is an action at all (and must therefore be done on your turn).
My point about initiative was that either your flat-footed (no AoO), or your turn has passed and you could have declared an IW and even readied an action...
And as I said I did not go into enough detail for you to make that claim, but since you are pressing:
Firstly I would say that your point about being flat-footed would be totally irrelevant as would initiative if the PC in question was a Rogue or a Barbarian with UD because they are never flat-footed. As I generally play Rogues this tends to be the point of reference that I write from when I contemplate examples.
Secondly since you want a detailed scenario here it is:
The scenario takes place in a dead end alley that is a town market area for food. The alley is 15' wide. The old lady and the thief are toward the dead end of the alley. The PC is between the NPCs in question and where the alley opens into the town's main thoroughfare. The old lady and the thief start off 60' away. There are random squares filled with "crowds" of people between the PC and the two NPCs in question. The PC hears a scream from the old lady and sees commotion up ahead. Initiative is rolled: Let's say the NPC thief goes first. He tries to run but the going is slow. He can't actually run because the crowds in his path prevent it, in fact moving through any square that has a crowd costs two squares of movement. So he must make a double move. That would normally be 60' but as previously stated there are crowded squares he must go through that cost two squares each so let's say that he has to pass through three crowded squares and he loses 6' total making his movement through the round 54' in the PC's direction. Now the PC can pretty clearly see the thief and he uses his move action to position himself in the center of the alley way so that he threatens both the 5' square on his left and right (the thief MUST pass through a threatened square to get by and he likely wouldn't even have his guard up because who would suspect a guy carrying a crate of apples). Crowds go on the last initiative count and move away from obvious danger so the next order of events would be that the crowd clears away from the fleeing thief. It is now the thief's turn again. The crowd has cleared and his path is now clear, save one townsman in the middle of the road holding a crate of apples. He runs by the PC and in so doing provokes an AoO.
DM: Would you like to make an attack of opportunity?
Player: With what I don't have a weapon?
DM: You can smash him in the head with that crate as an improvised weapon but you take -4 to the attack roll.
Player: Awesome!
And if that weren't enough the PC never took his standard action so he could very well have delayed his standard action for when the thief got close enough too. In that case he would get both a standard action attack and an AoO with his apple crate.
EDIT: Initiative usually makes most of the debate useless anyway. How often are you going to end your turn with a mug of ale in your hand while facing a combat situation?
Well in the case of a bar fight, as was the scenario, maybe the PC would want to attack his drunken foe (who is probably a level 1 commoner) with a mug and knock him out rather than draw his short sword and MURDER him.