Here's a biblatex solution. It doesn't need Biber (though of course it will work with it). It's not intended as a polished solution such as one might put together for a full style: it assumes your requirements apply: just books and articles; no bibliography. It allows you to use \cite and \parencite.
I wasn't sure how to deal with post notes. In the end I've slotted them into the middle of the citations, before the year.
I wasn't sure how to deal with repeated citations; as it is, I've just left them as is, but not repeated the year -- on the basis that you are trying to save space! It's probably simple enough, though, that you can pretty much understand what it's doing and fiddle with the details yourself.
(Don't treat this as an endorsement of this sort of citation system! But needs must, and it's quite a nice demonstration of the flexibility of Biblatex.)
\documentclass{article}
\usepackage{filecontents}
\begin{filecontents}{\jobname.bib}
@ARTICLE{smith,
author = {Smith and others},
journaltitle = {Phys. Rev. Lett.},
volume = {100},
pages = {123--456},
date = {2012},
}
@BOOK{jones,
author = {Jones, Arthur},
title = {Something about physics},
date = {2011},
publisher = {Dont Print Me},
}
\end{filecontents}
\usepackage[style=authoryear, backend=bibtex, citetracker=true]{biblatex}
% For compression, we just give the *first* page of an article
\DeclareFieldFormat{pages}{%
\mkfirstpage*{#1}}
\renewbibmacro{postnote}{%
\ifboolexpr{ test {\iffieldundef{postnote}}
or test {\iftoggle{postnoteprinted}}}
{}
{\setunit{\addcomma\space at\space}%
\ifboolexpr{ test {\iffieldundef{pagination}}
or test {\iffieldequalstr{pagination}{page}}}
{\printfield[default]{postnote}}
{\printfield{postnote}}
\global\toggletrue{postnoteprinted}}}
\newtoggle{postnoteprinted}
\renewbibmacro*{cite}{%
\global\togglefalse{postnoteprinted}%
\iffieldundef{shorthand}
{\ifboolexpr{ test {\ifentrytype{article}}
or test {\ifentrytype{book}} }
{\DeclareFieldAlias{journaltitle}{default}%
\usedriver{}{\thefield{entrytype}:abbrv}}
{{\ifthenelse{\ifnameundef{labelname}\OR\iffieldundef{labelyear}}
{\usebibmacro{cite:label}%
\setunit{\addspace}}
{\printnames{labelname}%
\setunit{\nameyeardelim}}%
\usebibmacro{cite:labelyear+extrayear}}}}
{\usebibmacro{cite:shorthand}}}
\DeclareBibliographyDriver{article:abbrv}{%
\usebibmacro{begentry}%
\printnames{labelname}
\setunit{\addcomma\space}%
\usebibmacro{journal+issuetitle}%
\setunit{\addcomma\space}%
\usebibmacro{note+pages}%
\usebibmacro{postnote}%
\setunit{\addspace}%
\usebibmacro{bracketedyear}%
\usebibmacro{finentry}}
\DeclareBibliographyDriver{book:abbrv}{%
\usebibmacro{begentry}%
\printnames{labelname}%
\setunit{\addcomma\space}%
\usebibmacro{maintitle+title}%
\usebibmacro{postnote}%
\setunit{\addspace}%
\usebibmacro{bracketedyear}%
\usebibmacro{finentry}}
% Always uses parentheses, because that was what the
% example showed. \mkbibparens would be better IMO.
\newbibmacro{bracketedyear}{%
\ifciteseen
{}
{\iffieldundef{year}
{}
{\printtext{(\printfield{year})}}}}
\addbibresource{\jobname.bib}
\begin{document}
Parenthetical citation: \parencite{smith}. Repeated \parencite[125]{smith}
Citation to a book: \cite[456]{jones}.
\end{document}

biblatexis probably the way to go; and you probably should give a better example of the spec you need in case the person who wants to answer doesn't know the basics of whatever (physics?) style you're loosely basing your document on. (Will, e.g., all references be to journal articles? That would make it much easier to implement....) – jon Aug 1 '12 at 20:28