PMI can be petitioned to be removed when you can document that you have achieved 20% equity in the home. In a declining market this may be challenging to say the least. However yes it can be removed.

As far as short sales go you can fire off as many as you like. There is no obligation and not any cost to you to do so. Realize a few things though, first that the lending conditions when you submit the short sale may be drastically different then when the short sale is actually accepted. Additionally keep in mind that it is difficult, though not impossible to get any concessions from the lender authorizing the short sale after it has been accepted. What I mean by that is you may want to try to make sure that you either build in repair costs to your original offer. That is, say you submit the offer, then 3 months later get acceptance, then you do your inspections, then you go back to them and say, okay I want 8k back for repairs. The short sale negotiator has to then review the file yet again. I am not saying he will not agree to that, BUT it is not a path I would recommend you follow. You may want to think about getting the inspection done before you make the offer or just discount your offer by what you think the repairs may add up to. Once you get that approval on the short sale going back and getting a second approval because you want more money back is kind of a pain. Just my opinion as other realtors may feel different.