The configuration is a Paste configuration file, which describes an application. The configuration file is found in server.conf, and the fixture searches parent directories for such a file until it finds one.
The app object is actually paste.tests.fixture.TestApp(paste_app).
Generally this should work easily if you have your application set up to run in Paste. But not so easy otherwise. Hrm... and I don't think I really have good documentation for the configuration file at this time :(