Hi Lavanya
1. How exactly can an LSO be integrated with PI?
Client Proxy - PI - SOAP
IDOC - PI - SOAP
RFC/BAPI - PI - SOAP
2. Do we have to use a specific version of PI for this?
NO(but Use latest one is best)
3. Are there any other possibilities of integrating the two without PI?
Check direclty from RFC/BAPI with webservice
4. Is webservice the only option for integrating with third party?
mosly depend on Third party how it integrate there are other also
like FTP and jdbc also
5. Can more than one third party content management system be integrated?
yes
check below doc for more:
Regards
Gagan