There's video of O-Sensei practicing with a "real" (metal) sword on the Aikido Journal DVDs. As I recall, he's showing techniques where uke is trying to prevent nage from drawing the sword.
Thanks Hugh. Are there any stills available online rather than DVD? Then we could all see and discuss them a bit more easily. Also, I'd really like to know if there are any photos of Osensei actually wielding a katana (not just posing with or drawing one).