Re: epatel's comment
I think the original question was asking about application configuration that an admin would be doing, not just storing user preferences. The suggestions you gave seem more for user prefs than application config, and aren't usually something that the user would ever deal with directly (the app should provide the configuration options in the UI, and then update the files). I really hope you'd never make the user have to view/edit the Registry. :)
As for the actual question, I'd say XML is probably OK, as plenty of people will be used to using that for configuration. As long as you organize the configuration values in an easy to use manner then the "angle bracket tax" shouldn't be too bad.
