In this episode Nick Harris and Nathan Totten are joined by Boris Scholl, Senior Program Manager on the Visual Studio Azure Tools team. During this episode Boris demonstrates the Windows Azure Diagnostics tooling enhancements introduced in the Windows Azure SDK 2.0 for Cloud Services and Windows Azure Websites and above
Update: In the video Boris mentioned that you have to manually add the Azure diagnostics trace listener to the web.config when you add a Windows Azure Cloud Service project to the WAP project.
He just confirmed that this only applies to SDK 2.0. In SDK 2.1 the trace listener is automatically added to the web.config of the WAP project.