For a Web Service that needs to read information form the web.config file (in its own virtual directory), the following is all you need to read the information:
using System.Configuration;
.
.
.
String value = ConfigurationManager.AppSettings["Param_1"].ToString();
The web.config file would contains something like this:
For more information, go to the following links:
http://www.dotnetfunda.com/articles/article13.aspx
The following link show how to read the root web.config file instead of the one in the virtual directory:
http://msdn.microsoft.com/en-us/library/610xe886.aspx