I'm going to start playing around with this soon, actually.  I have a project that requires some people in an internal department be able to have access to manage files quickly and easily on an external server (no direct windows explorer connection).  I'll have to see what I come up with.  Where individual web.config files can exist in sub-folders I suppose it might be possible to have the appropriate settings in there, but it seems there are some settings that must be set in the root application and cannot be overridden deeper in unless it is a whole new virtual directory on it's own.

As for users being able to modify their config files, perhaps I misunderstand, but isn't this sort of functionality considered rather advanced in the first place?  I mean, if it is truly advanced functionality you'd imagine that requiring the end-user to have some technical ability wouldn't necessarily be a con.

I am downloading your code now, very slick concept I might add!

I have actually gotten MTOM to work using WSE3.0 with the config in teh desktop modules folder and the Microsft.web.services3 dll in the bin. However, that solution requires all clients to use WSE3.0 and will not run in medium trust. I will take a look at what you have done and see about working your strategy to overcome the WSE limitations. For now it looks like I found a cheap hack around the file lock and we will probably publish the module using the standard web service api which will limit the upload size to the request size configured in the web.config.

I really appreciate your help! I will post back what I figure out after looking at your code.