http://blogs.msdn.com/b/rprabhu/archive/2005/06/29/433979.aspx Q: Why is there a version number in the user.config path? If I deploy a new version of my application, won't the user lose all the settings saved by the previous version?

A: There are couple of reasons why the user.config path is version sensitive. (1) To support side-by-side deployment of different versions of an application (you can do this with Clickonce, for example). It is possible for different version of the application to have different settings saved out. (2) When you upgrade an application, the settings class may have been altered and may not be compatible with what's saved out, which can lead to problems.

However, we have made it easy to upgrade settings from a previous version of the application to the latest. Simply call ApplicationSettingsBase.Upgrade() and it will retrieve settings from the previous version that match the current version of the class and store them out in the current version's user.config file. You also have the option of overriding this behavior either in your settings class or in your provider implementation.