Is it possible to modify (or just replace) web.config of existing site using MSDeploy?
It's possible to replace certain sections (specified with an xPath query or regular expression) of the web config file. Use the -declareParam en -setParam commandline switches for that.
Like so
msdeploy -verb:sync -source:apphostconfig="Default Web Site" -dest:package=ParameterPackage.zip -declareParam:name=param,kind=XmlFile,scope=web.config,match=//add/@value
or so:
msdeploy -verb:sync -source:package=ParameterPackage.zip -dest:auto -setParam:name=param,value=MyDefaultWebPage.htm
You can find more info here if you're using the command line.
If your working with importing and exporting packages in and from IIS you can create a parameters.xml file. Vishal Joshi has lots of good posts about how to use msdeploy (for example this)