We want to setup a local http & dhcp server and boot using gpxe to boot from network while maintaining a fixed set of aplications, starting with a fresh new OS on each boot. Any suggestions or ideas?
There's about five questions in there. Your solution comprises: - web server - dhcp server - PXE boot server - tftp boot server, enabled by... - xinetd - your customised SliTaz LiveCD, which is booted from another machine(s) using the PXE server.
First, I would read up on TazLito and customise a SliTaz installation. When you're happy with that, make your base system a sever of each type, in turn. I imagine you may need to customise your firewall settings too; Google will help with IPTables (I've always used GUIs on other distros!)