Tess Ferrandez has a great article on why debug=true is generally a bad thing to leave lying around in your ASP.NET app's web.config file. This can be a pain for hosting companies like the one I work for when customers upload their app still as a debug build and with debug=true left switched on. We have shared servers that have up to 700 websites on them and it took us a fair bit of time and effort to tune the Application Pools to work around this problem in ASP.NET 1.x. Fortunately now we get to turn it off globally in the machine.config file in ASP.NET 2.0.
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Disclaimer The opinions expressed herein are my own personal opinions and do not represent my employer's view in anyway.