I have a webapp where users can create their account and use the service. Now I want to give them a custom domain facility where app.customer1web.com points_to myser
One solution you could use is setting up a WildCard DNS Record for your application, and have the application itself check the RequestURI to see what host name the users are coming in on.
I know this is a very vague answer, but it sounds like having the WildCard record set up, with a single function checking the hostname is your best bet. This way, you do not have to set up a DNS record every time a customer signs up, and you have more time to yourself to do other things... like adding new features to your application!