Yes, you can install PHP5, lighttpd, and mysql. Last time I checked (a couple of weeks ago) PHP and mysql used up about 10 or 15 megabytes of rootfs space, not yet optified by the looks of things.

Quite a few applications are using QT now, so not really a good idea to get rid of that.

Fast application manager has come along way in the last month or two, so I think that'd be a good baseline for what you'll need to improve upon. Good luck sir.