Difference between WEB.CONFIG and APP.CONFIG file

web.config is used with web applications. web.config will by default have several configurations required for the web application. You can have a web.config for each folder under your web application.

app.config is used for windows applications. When you build the application in vs.net, it will be automatically renamed to <appname>.exe.config and this file has to be delivered along with your application.

Difference between Web.config and Machine.config

Scope:
Web.config => For particular application in IIS.
Machine.config = > For All the applications in IIS
Created:
Web.config => Created when you create an application
Machine.config => Create when you install Visual Studio  
Known as:
Web.config => is known as Application Level configuration file
Machine.config => is known as Machine level configuration file  
Location:
Web.config => In your application Directory
Machine.config => …\Microsoft.NET\Framework\(Version)\ CONFIG