I am using VS2010 C#.NET 3.5 and application settings (the Settings.settings file). What I want to do is have different settings for my development and production environmen
If you use web deployment projects, you can set it up so that different parts of your web.config will be replaced. You can read more about them here: http://weblogs.asp.net/scottgu/archive/2005/11/06/429723.aspx.
Another approach, that we actually take at my current job is to have multiple web.config files - 1 for each environment (e.g. web.config, web.config.production). Then when we build for deployment, we use msbuild to automatically swap web.config.production in as the web.config.