Christian: Yes, you can stream music from a website. If you want to use the fmod dll you have to include its source code.

Puppeteer: Sorry, it's a lite-C contest; nevertheless, you can use the free lite-C version to create your entry.

Ralph: You don't have to display the A7 Logo for this contest. You can have an array with 256 elements. You can store the options in a text file. You can open internet explorer using winapi.

GamerX: You can create bmps/textures at runtime and use them. Just make sure that your demo doesn't include any bitmap / texture before starting the game.