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I am actually in the learning phase of .NET related stuff and I was exploring how to save the application. I ended up writing my own class which saves the settings in an XML file and then I found that .NET itself supports saving application settings.
But I found 2 ways to do that. When I open add new item dialog in Visual Studio 2008, it gives option to create Settings file (.settings) or a configuration file (.config). Whats the difference between both and in what scenario they should be used?
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App. Config is an XML file that is used as a configuration file for your application. In other words, you store inside it any setting that you may want to change without having to change code (and recompiling). It is often used to store connection strings.
Web. Config is used for asp.net web projects / web services. App. Config is used for Windows Forms, Windows Services, Console Apps and WPF applications.
config file is what web application use where a desktop application uses app. config , and it's a good place to put application specific information. You can add keys to the <appSettings> tag, and use them in the application just as you would if you put them in that tag in the app.config file.
UPDATE: In ASP.NET Core Land, configuration is no longer managed via either of these - see this fantastic writeup from Travis Illig with the a-z on Microsoft.Extension.Configuration and Microsoft.Extensions.Configuration.Binder which are effectively a superset of all this
Settings (Both from a .settings set and Configuration.AppSettings), are stored in the .config file [alongside lots of other stuff].
The difference is that the .settings stuff [which was added in .NET 2.0 / VS2005] layers a strongly typed class on top of a set of settings that belong together whereas Configuration.AppSettings just lets you retrieve strings, forcing you to do any conversions, and doesnt have the notion of defaults. (the Configuration class has actually been shunted into a side assembly to reflect this - you need to add a reference to System.Configuration explicitly if you want it).
Adding a .settings to your project will result in an app.config being added to house the settings if you dont already have one. The class which reads the settings is automatically generated each time you change the list of settings for your component/application.
Other features of .Settings is the ability to designate some settings as user-specific (and also to save the user-specific settings with a single call).
The best reason of all to use .Settings is generally that you gain the ability to clearly identify who is using which setting in a code base by following usages of properties (and each set is a separate block in the XML file). Configuration.appSettings is more global in it's nature - it's just a bag of properties and you dont know which DLL, subsystem or class depends on a particular setting entry. See this blog post from Steven Smith for much more.
Finally, if you still haven't read enough about settings management, you're not going to beat this Rick Strahl post on the subject for completeness or sheer quantities of ideas and angles.
ASIDE: There's also the ASP.NET vNext Configuration stuff, outlined in this article which is quite flexible and offers a different angle on configuration settings management.
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