using the "Properties" menu entry of the WD project is of course the only valid way to go here. The used "portalapp.xml" file is created automatically and you should never change this by hand.
To specify sharing reference in <i>Web Dynpro</i> project you need right click on project, select "Properties", select "Web Dynpro References", select "Sharing references" and add new one.
If you mean providing the sharing refernce in Web Dynpro you can do that in the Build path. If you need to do that in the portal then you may provide the sharing refernce in the deployment descriptor(portalapp.xml)
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