Hi i am using VGA_core latest available in opencore.I wanted to know folders from which RTL files need to be added while"\vga_lcd\trunk\rtl\verilog" or "\vga_lcd\tags\rel_1\rtl\verilog" ?

Hi,
Either is probably fine.
trunk is in general used for active development and can therefore change, depends on development model but in general that is the case. tags is used when a project feels it has reached the release stage and want to release a design so a tag is "stable" and will have a known behaviour. I would choose a tag if you are not involved in developing the project further.