I've seen many guys confused about the .NET app.config file for the exe application and the dll assembly(we can see Visual Studio generate app.config file for both of exe and dll project). Here is a good article discussing on this:

 #App.config in C# with VS2005 - Part II: DLL within an EXE
http://juststuffreally.blogspot.com/2008/02/appconfig-in-c-with-vs2005-part-ii-dll.html