All discussion on how to beat the Dwarfs is to be posted in this thread. The best tactics will be amalgamated into this post.

Dwarf armies are a relatively easy army to beat with elves, if you have the right circumstances. I play dwarves and I can tell you know taht Wood elves have access to some of the best units for mopping them up.

Terrain Heavy boards If you are palying on a terrain heavy bard, prefferably with lots of woods, then Dwarves are very easy to deal with. A dwarf palyer will never willingly break apart his forces, especially if he's playing elves, but who said you would give them a choice? Warhawk riders are a beauty at this, keep hit and running into a single unit until the opponent is forced to deal with it, have soem cavalry ready, glade or wild, to set up a nice charge when they get far enough away. Use waywatchers to your advantage, dwarves are slow and very awkward to manouvere, pick off tehir most heavily armoured troops, tehy are as hard as nails in combat but killing blow can drop a few per turn. Most armies weakness is panic tests, not so in dwarves. Ld9 means that tehy are going to be staying right where they are, concentrate your glade guard shots on a single unit and wither it down as best you can. Treekin and treemen are relatively poor tools against dwarves, the high toughness and leadership values mean they do little more than bounce, and get shot by cannons. But players aren't willing to take that risk, use that to your advanatge, they will often throw away units to protect their more powerful and expensive squads, dirt cheap points ftw! Use them to capture table quaters during the later game stages, dwarves wont be able to follow

Gunline armies are more complicated to deal with, my advise is to ask them to step outside and then crush their models while they're not looking. Sadly we don't live in a palce where that is possible, so here's a little help for teh ineviatble event of fighting one. T3 is going to be slaughtered by gunlines, DO NOT EXPOSE ANYTHING! Keep your flimsy elves at teh back and out of thunderer range, quarrelers can still reach tehm but you can do just as bad back at them. Treekin are easily hidden behind a screen of dryads, which is essential as skirmishers mean dwarves hit on '6's Cavalry are to be used on flanks just watch out for warmachines and grape shots. Keep your dryad screen well away from organ guns! They were built to kill screens, use warhawk riders or whatever other speedy things you ahve to crush tehm while out of range of main force.

Light/no terrain boards Heaven forbid that wood elves and these boards be mixed, but should you meet such a thing tehn you have only a few options. Dryads are your best hope, T4 and fast moving, keep away from anything dedaly in shooting tersm and flank with cavalry where you can, improvise and be aware, there literally is nothing ese ou can do in this situation, hail of doom arrow is an invaluable trinket and treemen can win through brute force, but basically you wont be having a pleasant time trying to win.

As Flailing Axes has said, there are a number of different types of dwarf armies out there. I'll try to focus on a fairly balanced type of army that you might find in most friendly games. First of all, you are going to find big blocks of tough infantry, usually built to get maximum combat resolution with full command and ranks. These will be backed up by a good selection of artillery and missile troops. The strengths of the dwarfs (infantry-based, high armor, high toughness, defensive) are pretty much the opposite of wood elves (skirmisher/cavalry-based, manouverable, offensive).

Movement phase:
We are much more manouverable than the dwarf army especially with skirmishers and fast cavalry. Other than the war machines the dwarf missile troops are move-or-fire so stick to their flanks or give them a juicy target to turn towards (away from the rest of your advance) then move away next turn. Remember that you can't march-block dwarfs so they can always move 6" This makes them dangerous if you get too close. If your opponent takes the anvil of doom there is the possibility of a dwarf unit moving up to 12" in a turn so keep that in mind too.

Shooting Phase:
The dwarfs have higher strength shooting than we do. With the addition of war machines you are going to have to think twice before getting into a shooting battle with them. Against Dwarfs I would take 2 units of 10 glade guard and maybe a small unit of waywatchers to pick off war machine crews and missile troops. Glade riders aren't worth it because you can't march block and their low-strength shots won't be as effective against the high-toughness dwarfs.

Magic Phase:
Dwarfs have no wizards and the anvil now works in the shooting phase so you don't need to worry about magic defense. Trade in those scrolls for power stones. Magic-heavy is a good strategy vs. dwarfs, tree-sing is especially effective as you can use the forests to block line of sight from his war-machines or effectively block in a unit of infantry.

Close Combat:
All of your actions in the previous phases should be leading up to this phase. Only pick fights that you know you can win decisively. Wait as long as you can and get all your pieces in place before you strike because we can't win a long drawn out combat. Shock troops like wardancers can dish out a lot of attacks from a relatively small package and when combined with a unit of wild riders on the flank should be able to break most enemy units on the charge. Avoid units of hammerers since their stubbornness will allow them to hold until they are killed to a man. Treemen are good to take as long as you can shield them from war-machine fire as they will be the primary target.

Dwarfs are in many ways the opposite to our army but if we focus on our strengths while exploiting their weaknesses we should win the day.

Ahh the damn stunties. Well I'll go by unit that I'm familiar with.

Quarellers: These guys hit really hard when they manage to hit. Try to charge them and tie them up in combat as soon as you can cause any turn they don't shoot is good for us. Draw there fire with a unit of glade guard at the edge of a forest firing at him. Also remember to watch out incase they're equipped with great weapons cause they can be a fairly beefy unit when they have S5 T4 WS4 and light armor.

Thunderers: Kill them. Screen your delicate units with dryads and get them into combat as quickly as possible they can't take great weapons like quarellers so hit them with anything you can. Your biggest priority is to tie them up in combat so they can't shoot essentially killing their point value.

Iron Breakers: Watch out. These dudes are mean. 2+ armor save means you'll be losing a lot of wounds against them and they can hit pretty damn hard. I would recommend avoiding them and trying to go after easier vps but if they are really in your way try to get something that can knock out their armor saves in the rear or flank and get something that can really take a hit up front. A big unit of dryads would be good in the front and wardancers or treekin would be good on the flank or rear.

Warmachines: These guys shouldn't be too much of a problem just remember if you're going to play dwarves to take at least 2 units of hunters for these fuckers. Try a pimped out alter noble or some waywatchers. Just remember they're dwarves so they have gunners pride and won't flee and they've still got T4 and WS4 so they're not as easy to crack as normal warmachine crew.

Miners: These guys shouldn't be too much of a problem just don't leave anything behind. Have your whole force marching their asses off cause one of the only things we have on dwarves is our movement phase. If they have no targets of your end of the table then they'll deploy near them and at that point they're just more stunties to run circles around. Also remember to watch out for they're exploding charge\grenade thing. If you've got a treeman near them just stand there and use his strangleroot don't charge. If the dwarf dude falls for it he'll charge your treeman and not get to use his charge and you'll be free to hold kill a few and then counter charge next turn. Or if you roll good pwn them with your treeman.

Alright those are most of the units my friend has run in his army so far so as I see more of his troops in game I'll edit them into here.

One thing to remember when fighting dwarfs is that their missile troops can still have an armour save of 4+ in close combat (light armour and shield with hand weapon). With the statline of a regular dwarf warrior they are just as effective in close combat as they are at range. Combined with a good stand and shoot reaction you really have to think twice about charging them in the front. War machine crews are also quite resilient and perfectly capable of beating a great eagle or unit of glade riders in close combat, especially if there is an engineer present. The fact that they are stubborn too makes them even harder to beat.

I'll go over some units that sniperkneupper didn't:

Rangers: These guys are very overpriced so you probably won't see many of them but they are one of the hardest scouting units in the game. You can make longbeards into scouts if you really want to sink some points into a unit but with WS5, S4 (6 with the great weapons), Heavy armour, shields and the option of throwing axes, they are an elite infantry with the ability to scout. Hit them with treesinging if they deploy in a forest, shoot at them, strangleroot them, do whatever you can to weaken them before you charge them in the flank and rear which will be vulnerable because they will be out front all alone. Remember that all rangers have great weapons.

Slayers: Unbreakable and armed with the option of 2 hand weapons or 1 great weapon, they are not a good unit to go toe to toe with in close combat. Their lack of armour gives you a better solution. Shoot them! Either concentrate all your fire on them for a turn or two or avoid the flank that they are inevitably deployed on.

Hammerers: Stubborn and immune to fear and terror when led by a lord, these guys are THE elite infantry of the dwarf army. Their great weapons and WS4 S4 make them extremely hard hitting and the lord that will be in the unit will laugh at most units/characters etc. (I can make a dwarf lord that hits on 2's (vs WS6 and less, 3+ WS7 and up) and wounds on 2's with a 1+ AS and 4+ward save and immune to killing blow). Avoid this unit's front at all costs. As with the other elite infantry, shoot it first and then charge to the flank and rear if you really want to fight them.

Organ gun: This will turn our skirmishers into a smear on the table. It has a relatively short range (24") so I recommend staying out of that range. A treeman or treekin have less to worry about from it so if you get the chance to charge with them take it.

Gyrocopter: I haven't used this too often, but it gives a lot of mobility to an otherwise slow army. It's steam gun isn't all that powerful but against our low-toughness, unarmoured troops it could cause some havok. I would recommend sticking to the trees when it is around, and trying to hit it with a treeman or treekin although that will be tough given its high movement. Anyone else have any thoughts vs this?

Warriors: The basic troops. WS4, T4, LD9, heavy armour, shields, option for great weapons. These guys are hard. With the option to upgrade them to Longbeards (WS5, S4, immune to panic, units within 6" re-roll failed panic tests) they get even harder. I can't say anything other than what I've said before. Shoot them as much as possible, then charge them on the flanks and rear if possible.

Here is the basic philosophy vs dwarf infantry. Soften them up before charging, and when you do charge make sure you get something on the flank that takes out their rank bonus otherwise their static CR will have you beat before you even swing a sword. If you do charge them on the front, make sure you are so devastating on your charge that you are guaranteed to win combat by a lot.