Should I use server core vs full install for setting up webserver on a hyper-v VM

We run Moss 2007 and experienced no issues when upgrading our DC's to W2K8.

The main point of the default "core only" install of Windows Server 2008 is that is includes almost nothing - it is a bare system into which you install the few services and components that you need and nothing else (like the Debian base install and similar, if you are more familiar with Linux). Those DLLs are likely not "missing" - they are just part of components that you have not installed on the machine yet.

You should find out which components and services provide the libraries and other facilities your app requites and list them as pre-install dependencies for your application.

You should not ship system or 3rd party DLLs yourself as you suggest (unless the libraries come with relevant instructions, or a redistributable install set or mergable MSI) as you risk significant library versioning issues on the destination system. Also, you won't need just those DLLs that are referenced directly - those libraries will probably depend upon other that are also not present and may require other things (such as a mountain of registry settings perhaps) to be present in order for them to work correctly - getting all that together yourself would not be a pleasant job.

Edit: You might find more help finding which components your project is depending upon (that the Core install is lacking by default) over on StackOverflow, as it is probably more a developer question than an admin one.