A small application that I wrote some time ago just started acting up on me yesterday and today in a manner heretofore not seen.  The program utilizes WSE 2.0 and DIME to perform file transfers between the client and server.  The error was the following:

An unhandled exception of type 'System.Configuration.ConfigurationException' occured in microsoft.web.services2.dll

WSE032: There was an error loading the microsoft.web.services2 configuration section

I felt it bizarre that I'd never seen this error before, despite having installed and run my application hundreds of times in the past.  I was also having some networking trouble with my VPC (on which I was running this application) which correlates to the solution that I found online:

1. Ohad recommends adding your local computer's host name (can easily be discovered/remembered by typing HOSTNAME at a command prompt) to the %WINDIR%\System32\drivers\etc\hosts. file.  (BTW: This fixed it for me)
2. Also, if you have a configuration file (e.g. for controlling the timeToleranceInSeconds settings, et al), you need to ensure that you're using a fully qualified type name to the Microsoft.Web.Services2.Configuration.WebServicesConfiguration type.