web service overwriting web app folder

[Larry Brindise]

I have a solution with several projects; one is a web application, another
is a web service. I have set them both up so that
Properties-->Web-->Services-->
Use IIS Web server, with Project URL: = http://localhost/epnuc
for the web applicaiton, and the web server is:
Project URL: =
http://localhost/EPNUCWebService

However, when I compile the whole solution, the Setup Builder project
results in an error that says:
"two or more objects have the same target location
('[targetdir]\web.config')."

Now, why would web.config from two separate web projects land in the same
web folder when I have explicitly set them to be in different web folders as
noted above?

Please direct me to a better place to post this question if necessary.
Thanks!