Putting the connection string in web.config is a requirement for using additional providers. The DataConfig.config file is only understood by Sitefinity and it has a slightly different format for its own providers. Following the procedure from the blog post, you are making sure that any ASP.NET provider is mapped to Sitefinity, but moving the connection string is a requirement.
As for the Registration widget - are you using the Sitefinity Registration widget available in the toolbox, or a regular ASP.NET one?
All the best,
the Telerik team
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