I ran into a breaking change with Visual Studio 2010 SP1 and VSTO at a client today. It seems there was a change that caused Office addins to look for their config files in the application’s folder instead of from the addin’s folder (e.g. Word.exe.config or Excel.exe.config). The result is all sorts of chaos with AppSettings, WCF service bindings and anything else that needs to be read from the app.config
The details are posted here on connect - Visual Studio SP1 (or specifically VSTO sp1) Issue with config file location
The bug was caused by a change in the way VSTO 4.0 SP1 reads the Manifest value in the Windows Registry. Previously “[TARGETDIR]MyWordAddIn.vsto|vstolocal“ was valid but the URI has changed in SP1