is playing as unarmed khajit vialbe or will I be gimped compared to using one handed weapon?

Dont know. But heavy armor gauntlets at skill 30 let you take a perk that adds your heavy gauntlet armor rating to your unarmed damage. The heavy armor juggernaut perks increase armor rating. Khajit get bonus unarmed. I hear there is an npc with a magic item that buffs unarmed damage, which you could "acquire" and disenchant and then enchant your gear. Plus there is smithing to increase your heavy gauntlet armor rating even more.

If all these interact, then yes, it could work.

Posted this in another unarmed thread, maybe some other people will see it here and test it:

Level 30 heavy armor with the unarmed damage perk and level 100 heavy armor with all perks and a full heavy armor set show no difference in damage for me, has anyone else tested it?

Hopefully it's just a bug with my game.

Well, the perk only adds the armor of the gauntlets. The well-fitted, matching set perks probably increase your total armor, not the armor of each individual piece. So if you are wearing the same gauntlets, you would have the same damage.

The perk states "Unarmed attacks with Heavy Armor gauntlets do their armor rating in extra damage."

The armor rating on the gauntlets goes up with the level/perks, but the damage isn't increasing. Maybe the perk only refers to the base armor rating being added to unarmed damage?

Not really, but in the bar brawls you're pretty unstoppable

Basically, yes, I was trying to explain why.

Pretend you are wearing gauntlets armor 10 and chest piece armor 30. There are two ways the game can calculate your armor pool:

Method 1:
Gauntlets = 10+100%=20
Chest = 30+100%=60
Armor Pool = Gauntlets(20)+Chest(60)=80

Or Method 2:
Gauntlets = 10
Chest = 30
Armor Pool = Gauntlets*Bonus (20) + Chest*Bonus (60) = 80.

Same result, but the second doesn't treat the bonus as an increase in rating. Method 2 is probably easier to program (no need to distinguish between base rating and actual rating) and Bethesda probably just overlooked the effect it would have on the unarmed perk.

I'll test this today. I've been digging into Unarmed lately, trying to figure out exactly what does what.

And yes, Unarmed is Viable, although it's made significantly more viable if you're willing to take advantage of some crafting techniques. You'll need to have some sort of ranged option in mind as well, for those situations where you just can't get into melee (Krosis comes to mind). You'll need to get Heavy Armor, and spend a lot of perks in Heavy Armor early if you expect to live past level 20. Also, Pugilist Gloves are mandatory. You can get them in Riften, in the Ratworks, off an Orc. They're light armor, so you'll need to disenchant them, and re-enchant some heavy armor gloves.

tl;dr: Viable but requires forethought and a bit of effort. I'll post results on the Unarmed stuff once I have answers.

Ok, did some more digging. It appears that Unarmed only scales with Base Gauntlet Armor Rating. It does not change with increased heavy armor or one-handed skill, increased calculated armor rating, one-handed damage perks, or dual wield speed perks. That means the max Unarmed Weapon Damage you can have in the game is:

Base Unarmed Damage (whatever that is)
+15 for Khajiit
+14 Fortify Unarmed Enchant
+14 Fortify Unarmed Enchant
+18 Base Daedric Gauntlets Armor Rating

Base + 61 = Max Unarmed Damage

In comparison, someone wielding an Ebony or Daedric Mace (both do the same damage) can get weapon damage stats up to 536, although without significant investment in Smithing and Alchemy, that number is closer to 150.

So, technically viable, but certainly nothing close to ideal.