in reply to So, what *is* the best way to deliever dynamic content nowadays?
This sounds like an excellent fit for OpenInteract. (I'm a little biased, but still...) It provides much of the infrastructure you need for web applications -- authentication/authorization, security, centralized URL->action-mapping, easy data access (DBI, LDAP, ...), presentation framework using Template Toolkit, etc.
Since you're using a relatively low-powered machine, it would probably be good to spend a few minutes looking at the common mod_perl usage of lightweight proxy servers sitting in front of heavyweight mod_perl servers. This way you don't have to start many mod_perl servers that eat up your memory.
As for databases, PostgreSQL is more featureful than MySQL, easy to setup (as long as you're comfortable with ./configure; make; make install), updated often, low maintenance and well supported with not only DBD::Pg but also ODBC and JDBC drivers. I don't even use MySQL anymore unless someone specifically requests it.