You need to have the Hibernate 3.1 Core Libraries in your path. You also need to make sure that your project is setup to deploy libraries on your build path.
First go to your project properties, Java Build Path > Libraries. Make sure you have “Hibernate 3.1 Core Libraries” listed. If not you can add it by clicking Add Library > MyEclipse Library, then selecting it.
Next check your MyEclipse > Web > Deployment settings and make sure it’s set to deploy the user libraries.
Lastly if you have setup Tomcat to run directly from your project dir, then that is the problem; because the libraries don’t exist in your WEB-INF/lib dir until deployment time.