I checked it out after reading the OP and wow, Third Arm is amazing! It's exactly the kind of theatrical yet useful whip-stuff that you see on TV and in movies.

As for suggestions for the 3.5 version? Well, I like crack of fate, and wound is obviously necessary, but the problem with the whip (as amazing as it is) is the really low dice damage it actually deals. I agree with the OP that increasing it by 2 is not enough (nor is it really even class feature worthy, at least with respect to a whip).

Maybe instead of just Stunning, though, you could have a called shot class feature, where whipping them in the face causes temporary blindness, or you can snap one of their ears and they go deaf. Disable an arm or leg like the feat Stone Monkey from Dragon 309, or of course Stun. And yes, the Dex to DC makes more sense, as it's more about reflexively aiming it than putting power into the blow.

The Improved Trip is nice, as is the Improved Disarm, but maybe since it comes so late (Level 6 in a prestige class that took you at least 5 levels to get into) you could have a bonus, like treating the whip as a two-handed weapon for the purposes of Disarm, so it gets a +6 bonus on disarm checks instead of just a +2? And same for Trip? After all, you're putting effort into a whip-based prestige class, you should be better at tripping and disarming than some guy who spent two feats on it.

Maybe something that allows you to cause fear in wild animals and control them? You know, a lion tamer-like ability usable once per day? I think I've seen that in a different whip-based prestige class...

And while Binding wasn't the best application, how about binding with strangulation? I think with the right penalties to hit a whip-user could make a difficult called shot that lets him wrap the whip around his target's neck and he pulls it tight. Not enough for decapitation, but certainly enough for strangulation.