Ok below is a modified version of daaAdapter.template (SD_DataAccessAdapterTemplate)
Just replace the ReadConnectionStringFromConfig method with this code
        private string ReadConnectionStringFromConfig()
        {
            return System.Configuration.ConfigurationManager.ConnectionStrings[ConnectionStringKeyName].ConnectionString;
            //return ConfigFileHelper.ReadConnectionStringFromConfig( DataAccessAdapter.ConnectionStringKeyName);
        }
You should also modify whatever project file template ur using (i was using vsnet2005ProfileFile.template)
add the following to your references.
<Reference Include="System.configuration" />
And you'll be free from putting ur connection string in the old school v1.1 way. Hoorah!