I don't think it's been confirmed yet you can't block while dual-wielding melee weapons. Yes, you can't block while having magic in one hand, and something else in the other, but we don't know yet about the former.
In fact, one magazine said you could block holding both triggers on the consoles while dual-wielding. I assume this is for two melee weapons.
It would be cool if you could dual-wield a claymore and a bow and then shoot a claymore with a bow as if it was an arrow. XD
Anyway, I think that you should be able to block no matter what you have equipped, but quality of block will be decided based on what you have equipped.
Penalty of duel-wielding should be that your defense is really crappy and that block is bad compared to someone who has a shield, but should have much better offensive.
Especially critical strike attack where you should be able to stab enemy into the spine with one dagger and slit it's throat with other without him making any noise and than, if your sneak and dagger skills are high enough, you should be able to drag that enemy into the shadows with you and dispose of a corpse so other NPCs think that eliminated NPC went for a walk or something instead of alerting everyone because of the murderer that happened.