In my solution, I have 2 projects, call them Foo and Bar.  When deployed, Foo is the root site (http://mycompany.com) and Bar is a sub-directory (http://mycompany.com/sub).
When I work on them locally in IIS Express on my local machine, I need to replicate things into web.config of both projects since I work on them separately. For example, I have one of the HMTL5 Boilerplate rules for "cache busting" in my Rewrite rules:
<rewrite>
    <rules>
        <rule name="Cachebusting">
            <match url="^(.+)\.\d+(\.(js|css|png|jpg|gif)$)" />
              <action type="Rewrite" url="{R:1}{R:2}" />
        </rule>
    </rules>
</rewrite>
If I just leave it in the web.config for Foo, then when I work on Bar, it's not applied and I get errors since the rewrite isn't happening.  So I've replicated sections into the web.config for both projects.
But when I publish the solution to Azure, I get conflicts because of the inheritance rules since the web.config for Foo is in the root.
What is the best way to manage this? I tried to search on this topic but couldn't find this exact problem described.
Update:
My applicationhost.config for IIS Express is as such:
        <site name="Bar" id="3">
            <application path="/" applicationPool="Clr4IntegratedAppPool">
                <virtualDirectory path="/" physicalPath="E:\Code\mycompany\Bar\Bar" />
            </application>
            <bindings>
                <binding protocol="http" bindingInformation="*:65052:localhost" />
            </bindings>
        </site>
        <site name="Foo" id="4">
            <application path="/" applicationPool="Clr4IntegratedAppPool">
                <virtualDirectory path="/" physicalPath="E:\Code\mycompany\foo" />
            </application>
            <bindings>
                <binding protocol="http" bindingInformation="*:50477:localhost" />
            </bindings>
        </site>
I tried editing it to make both apps part of the same site, with these changes but no luck. Seems to have broken everything :)
        <site name="Foo" id="3">
            <application path="/" applicationPool="Clr4IntegratedAppPool">
                <virtualDirectory path="/" physicalPath="E:\Code\mycompany\foo" />
            </application>
            <application path="/Sub" applicationPool="Clr4IntegratedAppPool">
                <virtualDirectory path="/" physicalPath="E:\Code\mycompany\Bar\Bar" />
            </application>              
            <bindings>
                <binding protocol="http" bindingInformation="*:65052:localhost" />
            </bindings>
        </site>
 
     
     
    