FMS2 noob with capabilities question

Thanks in advance for any help you can offer.
I am just learning the basics of FMS2 and have some simple questions(I hope).
I currently have a php/mysql application that creates mixes of mp3s.The songs are played using progressive downloads and this is causing some concerns among the license holders.I understand that by using FMS2 I can stream the mp3s instead.
My question is about keeping current functionality after migrating to FMS2.
My mp3 player uses xml playlists.Its is already coded to hook into flashcom streams if needed. To create a playlist, a user searches the DB and adds songs to his account. I then use php to write the added song data to an xml playlist. The playlist is stored in the users folder, with a copy of the mp3 player. The mp3s are all pulled from a specific location on the server.

From what I have learned about FMS2 so far(which is very little), I am not sure if streams can be dynamically created in the same fashion. I have seen plenty of info about FMS2 streaming mp3s from a specific playlist with the mp3 all coming from the application folder, but not any info about what I am trying to attempt.

I would not be doing the coding myself, I can handle php/mysql but I know very little about action script and have little time to learn. But I want to know if I am barking up the wrong tree. Are dynamic streams possible? I dont want to look like an idiot when I try to hire someone to code an impossible solution. Im not looking for a how to, just want to know if the capability exists in FMS2

Thanks,

Matt