Down here under Monsters and Grappling probably explains it best:
http://www.wizards.com/default.asp?x=dnd/rg/20050322a
quote:
Some options available while grappling (such as “Damage Your Opponent” and “Pin Your Opponent”) state that they may be used in place of an attack. The monster gets as many “attacks” in a full attack action as it would get if it were attacking with a weapon, based on its base attack bonus: +1 to +5, one attack; +6 to +10, two attacks; +11 to +15, three attacks, and +16 and up, four attacks. Each one after the first would suffer a cumulative –5 penalty on the roll (just like a character with a high BAB making multiple weapon attacks).
'Monster' here can be a critter with natural attacks, or a regular person.
Now, can Monks Flurry in a Grapple?
It's kind of circumstantial. The Flurry Of Blows ability description says: "The resulting modified base attack bonuses are shown in the Flurry of Blows Attack Bonus column..." - though here it's treated as a whole separate mechanic from BAB, so probably not.
The D&D 3.5 FAQ offers this:
FAQ:
Can a monk make disarm, sunder, and trip attacks during her flurry of blows? What about grapple checks? What about bull rushes, overruns, or other special combat maneuvers?
As long as every attack is made with one of the monk’s special weapons (that is, weapons allowed as part of a flurry), the monk can perform any special attack that takes the place of a normal attack. She’s free to disarm, sunder, trip, and grapple to her heart’s content.
She couldn’t bull rush or overrun (since those don’t use special monk weapons), nor could she aid another (which requires a standard action) or feint (which requires a move action).
On the face of it, that seems to be a yes, but the author has failed to answer the whole question. Placed along trip and disarm and such, the grapple bit would seem to apply only to the touch attack to initiate a grapple. The grapple
check is a different beast, and these are not directly covered.
So, the answer would seem to be a resounding maybe. Maybe?
Personally, I'd probably go with DM Raven's BAB-only interpretation, it's the only definite description of what's allowed - but then, I've just been murdered by flurry-grappling. :)