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Configuring DataLab is one of the most important step. [Note: Read more on Configuration Values]
The two main configuration values which need to be set are:
DataConnectionString
DiagnosticsConnectionString
These ConnectionStrings are used to connect to Windows Azure Storage. They consist of a protocol, a storage account name and a storage account key. To make things convenient there are replacement characters for the two values that need to be added.
Once these steps have been completed following the instructions for How to Create a Hosted Service on the MSDN Website will provide you the appropriate steps for deploying an Application to Windows Azure.