ASP.Net allowDefinition='MachineToApplication' Error

I've come across this problem a number of times now and it was beginning to annoy me. A few times when building projects on continuous integration servers and today when upgrading my MVC web app to MVC 2 I hit the following error:

It is an error to use a section registered as allowDefinition='MachineToApplication' beyond application level This error can be caused by a virtual directory not being configured as an application in IIS.

Everytime I failed to figure out what the problem was and instead I had to admit defeat and use a work-around :(

Well the error message is quite helpful for some people getting this error at runtime and tells them how to fix the problem - configure the web apps virtual directory to be an application. However, I'd been stumbling upon this delightful error when compiling projects - not at runtime!

Luckily I had a light bulb moment... the compiler was not referring to my main web.config for the application, but instead was moaning about a web.config within a sub directory of my application (a backup of the project). Deleting the backup sub directory solved my problems!

I got 99 problems but my web.config ain't one!