I currently have 2 x ASP.NET 3.5 web applications in IIS7 (lets call them WebParent and WebChild).
WebChild is nested within the WebParent listing in IIS7 and is set
If they are repeated, you'll have to then in the child application web.config first, then add back the element you'd like it it's place. This is assuming that you'd like to have a different value. If you don't, then just omit the element. A connection string would be a good example of something that is likely common for all applications - so you only need to specify it in the root.
Example: