Seems like it should work without too much pain, but the fact of the matter is each time you increment the version on your application a new version folder will be created that is by default empty and the user.config file is empty which means the user config is lost and the user has to reconfigure the specific settings in the app. Painful, and a bad user experience no less.
This is really simple to take care of by adding an additional setting in your application settings and modifying code in the settings.cs file.
Jim Scott covers the process here. Happy Coding!