Please refer to the following URL to know the differences between web.config and machine.config,http://onlydifferencefaqs.blogspot.in/2012/07/aspnet-difference-faqsdoc.html

1.The settings made in the web.config file are applied to that particular web application
only whereas the settings of machine.config file are applied to the whole asp.net application.

2.Web.config file Setting of asp.net all project mach.config are setting of server setting and
when the web side are implemented time it work all project but web.config file set all projects.