1) The built-in code to access an app.config from .NET is very full-featured and easy to use.
2) You can install the application without having to create registry entries.
3) You can remove the install without having to worry about removing registry entries.
4) You don't have to worry about access permissions to the registry (like from Vista). However, Unprivileged user normally do not have access to the "Program Files" folder or any subfolders, and usually the app.config file will go there.
5) Content in App.config can be protected using RSA Protected configuration providers available in .Net framework
6) App.config is a XML based hirerarical tree structure database which follows standards understod by .Net and which can be accessed like objects by .Net Code unlike registry data.