Anaconda, the RPM's, the appearance, would all be like Fedora Core, but you have to remember that in order to create a release that is appropriate for lower end computers, there need to be changes. No one would expect a LT distro to be everything that a regular distro is. If the KDE apps can run w/o the desktop environment, feel free to remove it. If you can find apps that are as capable and small as the kde ones, feel free to remove them too.
If you want to switch GNOME back to the version distributed in RedHat 7.3, that would be light enough for a FC-LT.
If you want to re-write GNOME to make it faster and lighter, you can try that too, it might be light enough for FC-LT.
My idea is not so much about making a 2 CD version of Fedora Core as it is about putting together a light linux distro that has many of the benefits of Fedora Core, including compatability, anaconda, bluecurve where possible, system-config-* utilities, and a fast release cycle.
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