Hi Jamie,
Its basically the same thing as declaring controls at the top of .aspx files or .ascx files, but putting them in Web.config makes it so you don't have to declare them in the .aspx or .ascx files.
btw, on the topic of making web.config easier, I have implemented in recent versions but not yet documented or advertised that we no longer need to maintain smtp settings in both the system.net section of web.config and in user.config. It should now work entirely based on user.config or sitesettings smtp settings.
So we can probably change the documentation, but I wonder if you could test and verify my work before we do change the docs that it works correctly for registration, password recovery, places where it previously used the other settings? ie change or disable those old settings and verify it works.
No pressure or anything, just if you get a chance, it would help me and I figure it would save you one thing you've had to maintain ;-D
Best,
Joe