Have you seen the august Sport Compact Car? they have a big article on stuff you can do to improve 1/4 times for free. they actually end up hacking the car to bits, but theres some stuff you actually CAN do:

stripped interior - passenger and back seats, trunk bottom deck thingy, spare tire, door panels, speakers/stereoif your REALLY

serious about beating the guy:
remove a/c compressor, remove power steering pump, remove body peices(trunk lid, doors), take out headlights and taillights, you can run TEMPORARILY with no alternator, but you gotta get it back on for the drive home. Remove exhuast (if youre at the track)

good luck