How to interact with a running lisp instance?  I have been trying to figure this out.  I know this is being done with slime.  Does any one have any good pointer on this.  I am thinking of writing a web application and would like to be able to update it on the fly for updates and bug fixes. 

Why not just use slime/swank?  You can open an ssh tunnel to your web server and use slime-connect.

hope this helps,
Michael