What's the deal with flaming the rind? I had never seen that until I ordered an Old Fashion at that bar in DC. The bartender did it there. And I'll admit that it looked totally awesome, but that I also had no idea what was going on.
According to this article, coffeesp00ns is right: Anyway, that's what the cocktail books tell you. I can't say I've ever noticed much of a flavor difference between a twisted peel and a flamed one, but it certainly makes your drinking rituals a little more showy. And honestly, who doesn't love a little showmanship at cocktail hour? You work your tail feathers off; you deserve it.The principle behind a flamed twist is the same as any twist, really. You're squeezing oil out of the peel and onto the surface of the cocktail. In this case, though, you're squeezing it through a flame, which lightly caramelizes the oil and subtly enhances its flavor.
I'm going to go out on a limb and say that is caramelizes some of the sugars on the rind, helping to sweeten it a bit, and bring out some of the other flavours. The branch I'm on could crack under the weight of my incorrectness, however.