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Looking at GEGL, which gimp is moving to might be a good way. It's also a nice system that could get something more than photoshop.

Gimp might be a better source of inspiration for this sort of thing.

I wouldn't call it photoshop, but did you have something like this in mind: http://pjtops.com/app/neonTextEffects/

Sure it could, albeit in a more limited way. It has been done actually, at least in Flash (which includes some similar bitmap features, although it is vector based).

The main problem, as is with Flash based editors, would be performance.

>Is anyone aware of an article that explains the architecture of Photoshop? How pixels are processed through its stack of layers?

Well, the layers are just different images with alpha transparency drawn on top of each other, and the blend modes are just math done between two layers' pixel values.

Here's an (rather basic) article:

http://photoblogstop.com/photoshop/photoshop-blend-modes-exp...