I'm sure I have spent at least as much time as you trying to work out how to work w/ your source structure. The quick fix is to convert to an exploded WAR and the struggle will end.
I'm working on an extended tutorial that includes JSTL tags. No they are not known out of the box. JSTL is just another tag library that must be configured and setup appropriately. EA2 or 3 will provide a taglib repository to choose from when creating a web project and JSPs. For now you have to set up the JSTL libs yourself.
The compilation errors are a result of your choice not to configure your application with the J2EE 1.3 Library Set. This means that no J2EE libraries are linked with your project. This option is for users of other tools that already have a J2EE project structure configured with their own libraries. So you need to add your own J2EE libraries to the project. The EA1 does not allow you to manually add the Library Set to your project. This is being addressed for EA2.
Lastly I knew that the webroot link back into your source would cause it to be replicated in the WEB-INF classes directory but that should not cause a problem as long as you don't try editing these files. They are a result of trying to point the web root back into a source folder - not really a good idea.
.../_cvsroot/src/webroot/WEB-INF/classes/webroot/WEB-INF/classes/webroot/WEB-INF/classes/webroot/index.jsp) not in base path (.../_cvsroot/Web Root/).
So are you trying to edit this file or did the JSP compiler pick it up? I ran a test before proposing this process to verify that compilation errors would not result.
Seriously, I have hinted at it a number of times but this long process can avoided if your codebase is organized in an exploded WAR format. I'll have an extended tutorial in a few days that demonstrates JSPs, JSTL setup, Servlet creation and JBoss deployment and hot-swap debugging. It will provide more background in some of the principles behind MyEclipse Web project and J2EE project organization best practices.
If you need the JSTL and web.xml with it preconfigured let me know and I'll mail you zip.