OK, I did a little poking around. There are several FAA opinions on this, the most recent one I could find references several others and seems to make these conclusions (taking previous findings into account)...

http://www.faa.gov/about/office_org/...Martindell.pdf

- Paid flight instruction IS "other commercial flying" for purposes of 135 flight time limits (I think we can assume that would apply to 121 too).

- Any paid 91 flying is "other commercial flying" and counts against flight time limits (obviously).

- Non-paid flight instruction is NOT "other commercial flying" and does not count against any limits. They seem to consider this a recreational activity, which makes sense. Teaching my family member to fly is less tiring than some of the other things I do in my off time.

You have to be careful on the last. "Compensation" can include things other than money. Historically, gifts, hotel accommodations, meals, etc might be considered compensation. In some cases flight time itself might be considered compensation, but I think this would have to be pretty clear-cut, ie a time builder who makes it known to all comers that he will CFI for free to build time. One of the FAA opinions specifically used an example of teaching a spouse as non-compensated CFI work , so teaching a relative or friend should be OK. But if you have a lot of "friends" whom you teach that might raise questions.

This is actually good clarification from the feds, for years there were different opinions, some folks said CFI was commercial flying whether paid or not because you needed a commercial ticket. Others said it was not commercial flying because you don't need a medical.

These opinions don't address the affect of "other commercial flying" on 135/121 duty/rest, I'll try to look that up later.