can brewing systems made from kegs be used commercially, and in California?

I am a teacher but when I grow up I would like to open a small (I mean tiny) brewery. I understand the economic concerns of a small brewery but my question is: Are any breweries operating using brew-systems from altered kegs? Any in CA? I have been scouring the net to try and find info. The Dept of Alcohol and Tobacco has some info but nothing pertaining specifically to equimpent requirements. I ahve read about the Dogfish Head founder, Sam Cagalonie, starting using this type of system but I don't know if this claim is true. More importantly, Im trying to find out about California's rules and regs. Any info or links is greatly appreciated.

I can't speak to CA law specifically, but there are a number of nano breweries that have used altered kegs, as well as larger breweries that use them for pilot batches or small batches in a pub setting. SABCO/Brew Magic is just one of many systems that has been used commercially in this way.

That being said, I have brewed on a one bbl K/O brewhouse (converted Groen soup kettles) putting out 24 bbls/week and don't want to go there again!