using XmlArrayItem attribute without XmlArray on Serializable C# class

The following should serialize properly the way you want. The clue being [XmlElement("credentials")] on the list. I did this by taking your xml, generating a schema (xsd) from it in Visual Studio. Then running xsd.exe on the schema to generate a class. (And some small edits)

public class CredentialsSection
{
    public string Username { get; set; }
    public string Password { get; set; }
}

[XmlRoot(Namespace = "", IsNullable = false)]
public class configuration
{
    /// <remarks/>
    public string logging { get; set; }

    /// <remarks/>
    [XmlElement("credentials")]
    public List<CredentialsSection> credentials { get; set; }

    public string Serialize()
    {
        var credentialsSection = new CredentialsSection {Username = "a", Password = "b"};
        this.credentials = new List<CredentialsSection> {credentialsSection, credentialsSection};
        this.logging = "log this";
        XmlSerializer s = new XmlSerializer(this.GetType());
        StringBuilder sb = new StringBuilder();
        TextWriter w = new StringWriter(sb);
        s.Serialize(w, this);
        w.Flush();
        return sb.ToString();
    }
}

give the following output

<?xml version="1.0" encoding="utf-16"?>
<configuration xmlns:xsd="http://www.w3.org/2001/XMLSchema" xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance">
  <logging>log this</logging>
  <credentials>
    <Username>a</Username>
    <Password>b</Password>
  </credentials>
  <credentials>
    <Username>a</Username>
    <Password>b</Password>
  </credentials>
</configuration>