You bet it can, according to Dennis Chung, who  took a colleague's challenge and used virtualization technology to load up IIS 7, PHP, MySQL, WordPress together and run them on Windows Server Core. To find out how he did it, check his blog at http://windowsmvp.spaces.live.com/

And check out the blog of the guy who egged him on to try this new usage scenario on Windows Server Core. His reaction is that fast as the setup and configuration was he figures with some more automation they could really speed it up. http://blogs.msdn.com/the_hardman/archive/2007/11/19/sneak-peak.aspx