Is there any documentation for 'dx'?
In particular, I am interested in knowing what the --core-library option does.
This is a special purpose flag that is only used when building some of the framework JAR files (core.jar, framework.jar, etc.). Normally, dx will refuse to process any java.* or javax.* classes. So this option is used for core.jar, where all those classes are actually defined.
Here's a relevant blurb from the dx source (dalvik/dx/src/com/android/dx/command/dexer/Main.java), that gets printed if you try to include a java.* or javax.* class in an application.
Ill-advised or mistaken usage of a core class (java.* or javax.*) when not building a core library. This is often due to inadvertently including a core library file in your application's project, when using an IDE (such as Eclipse). If you are sure you're not intentionally defining a core class, then this is the most likely explanation of what's going on.
However, you might actually be trying to define a class in a core namespace, the source of which you may have taken, for example, from a non-Android virtual machine project. This will most assuredly not work. At a minimum, it jeopardizes the compatibility of your app with future versions of the platform. It is also often of questionable legality.
If you really intend to build a core library -- which is only appropriate as part of creating a full virtual machine distribution, as opposed to compiling an application -- then use the "--core-library" option to suppress this error message. If you go ahead and use "--core-library" but are in fact building an application, then be forewarned that your application will still fail to build or run, at some point. Please be prepared for angry customers who find, for example, that your application ceases to function once they upgrade their operating system. You will be to blame for this problem.
If you are legitimately using some code that happens to be in a core package, then the easiest safe alternative you have is to repackage that code. That is, move the classes in question into your own package namespace. This means that they will never be in conflict with core system classes. JarJar is a tool that may help you in this endeavor. If you find that you cannot do this, then that is an indication that the path you are on will ultimately lead to pain, suffering, grief, and lamentation.