Now that Blitz supports blended vertex weights, the best way to do facial animation is with bones; I'm working on a demo of that.
In the meantime however the best approach would be to use md2 file format. Md2 allows morphing animation. Export the head as an md2 object (I'm not sure how this is done with Lightwave but I'm sure it can be done; if necessary export the frames to separate objects to stitch together in some other tool like Q2 Modeler) with each morph target a separate frame. Now use the transition parameter of AnimateMD2 to smoothly morph between targets/frames.
Another approach is direct manipulation of vertices in code. In other words what you already pointed out: export the vertex positions into a text file and parse that yourself in Blitz.
In the meantime however the best approach would be to use md2 file format. Md2 allows morphing animation. Export the head as an md2 object (I'm not sure how this is done with Lightwave but I'm sure it can be done; if necessary export the frames to separate objects to stitch together in some other tool like Q2 Modeler) with each morph target a separate frame. Now use the transition parameter of AnimateMD2 to smoothly morph between targets/frames.
Another approach is direct manipulation of vertices in code. In other words what you already pointed out: export the vertex positions into a text file and parse that yourself in Blitz.