I want to compute the daily market capitalization of companies during
2000.  I can find two closing prices on finance.yahoo.com: close and
adjusted close.  I can only find the outstanding shares currently. 
What are the problems, if there are, with doing mc=adjusted
close*current outstanding shares.  Obviously I should be correcting
for splits.  But how do dividends affect the mc.  Also, does adjusted
account for new shares being issued? I need authoritative answer.

You've got the right idea. Adjusted * Current Outstanding will uncover
the "moving" market cap. The adjusted price does account for
dividends.

New shares offered might be tricky though. Yahoo's adjusted price
probably doesn't account for this because they are getting their
market cap and adjusted price data from different sources. One route
is to email them and ask.

Hope this helps.