We have seen the "Object reference not set ..." message from the Entity Data Model. It is innocuous in this case - I think it might be happening when we move the project containing the EDMX file into the solution folder. You'll also see that message if the Designer section of the EDMX contains errors, and in some other situations too. These problems all seem to be more warnings than true errors, and do not cause a problem with code generation or the running of the application. I think MS might be addressing some of these issues as they further enhance the EDM designer. I'll file a bug report to see if we can fix the problem you found.
We haven't seen the app.config update error before, and I couldn't repro it just now. Let us know if you see this error on a regular basis or can easily repro.
Thanks for your feedback, and please do report other issues as you find them.