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What version are you using? If I recall correctly, an earlier version set connection string in the machine.config to empty string ("") which is not acceptable, so it was changed to set it to a space (" "). In that case though, it was causing issues just from being install, as opposed to being used though.
Since you're actually using the product, you need to set the connection string correctly, which you'd normally do in your web.config (rather than globally in the machine.config). Did you set it? What do you have it set to?
Edited by: gdarling on Jul 6, 2012 9:11 AM
I had the exact same problem.
I needed to add the connection string information in my web.config file. Since I was using the Oracle data provider I needed to add the following string in the connectionStrings section
<add name="OraAspNetConString" connectionString="User Id=USERID;password=password; Data Source=databasename "/>
Then, it worked fine.