If you need different web.config versions then it's worth looking at using web.config transformations :
http://www.asp.net/mvc/tutorials/deployment/visual-studio-web-deployment/web-config-transformations

Especially useful if there are only a few differences (e.g connection strings etc.).. It's preferable to maintaining individual .configs in that you have a 'master' copy - if you change that then any changes will propagate to other versions (unless they've been overwritten)

>UPDATE: Found Solution. Need to convert Virtual Directory into the Application in IIS of Server 2008.
>
>
>Hi,
>
>The purpose of the following test is to make two application use separate copies of web.config.
>
>I have an ASP.NET (4.0) application running on Server 2008 as a site "MySite". This app has web.config that set Forms authentication. Everything works.
>
>I create a test application (in VS 2012). Then on the Server 2008 in the site "MySite" I created a Virtual Directory "MyVDir" where I have one page (test.aspx and bin folder with test.dll). The MyVDir also has web.config which has Authentication set to "None". When I try to Browse the test.aspx in the Virtual Directory I get error:
>
>

>Configuration Error 
>Description: An error occurred during the processing of a configuration file required to service this request. Please review the specific 
>error details below and modify your configuration file appropriately. 
>
>Parser Error Message: 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.
>

>
>The error points to the line Authentication in the web.config of the Virtual Directory.
>
>What am I missing? TIA.