Embeddable in browser LaTeX editor/compiler plugin?

You could look into the Common LaTeX Service Interface which powers ScribTeX and, I believe, LaTeX Lab. The CLSI exposes TeX compilers as a web service by accepting requests with document code, compiling the documents in a sandboxed environment and returning the PDF results.

For displaying PDF output in the browser, you might want to check out Mozilla's PDF.js project. The code is still in beta, but the feature set and rendering quality is pretty impressive.

You could use ScribTeX which runs a TeX Live 2009 distribution (at the moment). It allows you to create files (for, say, storing .bib content) and even compile using pdflatex, latex or xelatex. In fact, your document compiled without problem.

It does not require a login, but temporary users would lose their saved content without one.

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Of interest, on a smaller scale, might be the Online LaTeX equation editor. It seems like this can be driven from your own web page (click on the install link). However, this only provides limit online capability for editing equations and not entire documents.

It is definitively possible, as shown by the (German language) Kochbuch für LaTeX ("cookbook for LaTeX"). It has a very nice interface where you can choose to generate an image, a dvi file or a postscript file). Currently it doesn't seem to work correctly (I'm not able to get output files), but it definitively did at some time. There are many mirrors of that (but I didn't find one which currently works), so the author might be willing to share the code with you.