I believe that the <appsettings/> collection in your app.config/web.config allows you to store settings in key-value pairs, and is accessed through the System.Configuration API, as follows:
string setting = System.Configuration.ConfigurationManager.AppSettings["settingName"];
Settings can only be stored and retrieved as string values.
They can also be accessed through System.Configuration.ConfigurationSettings, but this way has been deprecated.
The <ApplicationSettings/> collection in your config file stores your settings in a strongly typed manner, and also allows you to access these settings in a strongly typed way. VS automatically generates wrapper classes for you, in the settings.settings file in the Properties folder of your project. To add a settings file to your project, right click on your project, and click Properties, then open the Settings tab. Then click the link to add a new settings file. VS will automatically generate one for you. It's that easy.
You usually access your settings as follows:
MyProjectName.Properties.Settings.Default.SettingName
Notice the difference in how the two collections are accessed.
The second (non-deprecated) way of storing settings is the better way to do it, and provides lots of flexibility and power. It takes some learning though - but it is worth the effort.
