Nested ASP.NET 'application' within IIS inheriting parent config values?

Question

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

Answer 1

Follow Scott's advise and also ensure that you have right clicked WebChild in IIS and selected Convert to Application.