Currently, the deployer does not perform a transitive closure and create a jar for every project referenced in a transitive manner from every dependant project of a web project. It specifically looks one level deep to provide you with an exact way of specifying exactly what you want packaged (by created a project dependency) versus those projects / jars used internally that might already exist in the server at runtime through other means. So, if you have projects that need to be deployed because your dependent projects need them, you’ll currently have to specify them as a direct dependent of the web project as well. Full details on how all this work is in the Advanced section of the Working With Web Projects Quickstart that’s available in the Documentation Section here: http://www.myeclipseide.com/ContentExpress-display-ceid-67.html
With each release of MyEclipse we continue to add additional deployment flexibility and will continue to do so in the future. We’re currently looking at providing a manual model that will allow full specification of precisely what will be deployed and where it will go, but this capability is still a release or two away.