I had a console app that used an external dll to zip files up.  The app worked great.  For the program to work properly it required both the files.  I wanted to just have the one exe with no dll.  My first search gave me some pay for utility (yucky) and then Bill saved the day once again by suggesting ILMerge.

I used ILMerge in the "Post-build event command line" box in my project settings like so (notice that you do indeed need to keep the quotes because of spaces in the path):

"c:\Program Files\Microsoft\ILMerge\ILMerge.exe" /wildcards /log:ILMerge.log /out:"$(TargetDir)JabuC.exe" "$(TargetPath)" "$(TargetDir)Ionic.Utils.Zip.dll"

This outputs what I wanted, one JabuC.exe that has the Ionic.Utils.Zip.dll included in it.  Presto!