From IanG: Why Writing Into .NET Application Configuration Files Is a Bad Idea. This is good information, especially the section “Where Should I Put This Information Then?” 

I often think that .config files can be improved upon as well.  I've batted around the idea of creating a “configuration service” that could be accessed by a bunch of different apps that need common configuration information.  I think if something like this were designed the right way, it could be really useful. All an application would need to do would be to identify itself, and the config service could provide common or custom configuration information.  Perhaps someday I'll find some time to work on this.

-Brendan