Use the following procedure to create a file named stsadm.exe.config. This file must contain the same XML element that you added to the Web.config files. This file enables the Stsadm command-line utility to determine how to find the authentication provider you want to use.
Create the stsadm.exe.config file
1. Open an ASCII text editor, such as Notepad, and add the following text:
<?xml version=”1.0″ encoding=”UTF-8″ standalone=”yes”?>
2. Insert the same custom XML element named <connectionStrings> that you added to your Web.config files in the preceding step after the <configuration> tag.
3. If you are using custom <membership> or <roleManager> elements, you must insert them inside the <system.web> element.
4. Save the file and name it stsadm.exe.config.
5. You must ensure that the text editor you are using does not add the .txt extension to the filename. If this occurs, remove the .txt extension before proceeding to the next step.
6. Copy the stsadm.exe.config file to the following folder on each server in the farm from which a farm administrator might use the stsadm.exe utility:
systemdrive:\Program Files\Common Files\Microsoft Shared\web server extensions\12\BIN
We recommend that you copy this file to each server in the server farm.
See this post for more info