I finally got around yesterday evening to updating my Windows Azure Application from the 1.2 SDK to the 1.3 SDK.  Wow, what a fun strange trip that was.  Yes Virginia, it is possible to upgrade.  I ran across the following two issues:

• Don't try to use beta features if you aren't signed up for them.  Ok, this one should have been obvious, unfortunately, it wasn't.  What was my first thought when I started my upgrade? Of course, it was to try out the ExtraSmall VM.  So, I plugged that into my .csdef file..........and my deployment promptly died with no info as to what had happened beyond some cryptic messages.  Finally, I dug through and figure out that the "Windows.Azure.......PassWord.Encryption.........IDonCareWhatYouTriedToDoException" meant that my app did not have the ExtraSmall VM beta allowed on Azure.  I went back to the Small VM Size to deploy my app with, and the app deployed.  Problem #1 solved.
• Did I test my app after I deployed it?  Of course not.  Its my test app. There are a few users, but nothing huge.  I logged in this morning, and bomb, the app died.  WTF had I done?  WTF was broken due to moving from 1.2 to 1.3?  I was getting this error
  

  “SetConfigurationSettingPublisher needs to be called before FromConfigurationSetting can be used”

  
  I looked at the error, set some break points and ran locally. Boom, it didn't work here either.  Great, what was wrong.  Finally, I found the answer. The change to using the Full IIS7 instead of the Web Core had introduced a breaking change in the app.  So, I copied some code from my WebRole.cs to my Global.asax and things worked.  Sweetness.  Here is the code, it will look a little familiar to someone developing in Azure.

        void Application_Start(object sender, EventArgs e)
        {
            // Code that runs on application startup
            CloudStorageAccount.SetConfigurationSettingPublisher(
                 (configName, configSettingPublisher) =>
                 {
                     var connectionString = RoleEnvironment.IsAvailable
                     ? RoleEnvironment.GetConfigurationSettingValue(configName)
                     : ConfigurationManager.AppSettings[configName];
                     connectionString = RoleEnvironment
                              .GetConfigurationSettingValue(configName);
                     configSettingPublisher(connectionString);
                 });

            // For information on handling configuration changes
            // see the MSDN topic at http://go.microsoft.com/fwlink/?LinkId=166357.
            RoleEnvironment.Changing += RoleEnvironmentChanging;

        }
        private void RoleEnvironmentChanging(object sender, RoleEnvironmentChangingEventArgs e)
        {
            // If a configuration setting is changing
            if (e.Changes.Any(change => change is RoleEnvironmentConfigurationSettingChange))
            {
                // Set e.Cancel to true to restart this role instance
                e.Cancel = true;
            }
        }

Now, my Azure app is back running and chugging along. Hopefully, this helps you out some.