so looks like the sender of the settings doesn't apply them to the established connection until the recipient sends an ACK.  This seems to imply that the sender needs a connection-scoped field for pendingSettings, which replaces a connection-scoped field settings once an ack is received.

http://tools.ietf.org/html/draft-ietf-httpbis-http2-09#section-6.5.3

In general, we probably need more work to clarify connection-scoped messages (and errors) from stream ones.