At the moment the string is in the appSettings, to keep the # of templates to a minimum (the config read routine is in the template).
I'm aware that in .NET 2.0, a special tag is reserved for it, and it will likely be moved to that tag in v2.0, IF it allows for more than one connection string.
If you want to use the connection string tag now, you can. Read the connection string yourself and pass it to the DataAccessAdapter constructor.