Microsoft came out with an AJAX library for use with ASP.NET 2.0. They have a great support website located at ajax.asp.net. Lots of great videos and it works easily when you create a new website from scratch.
After about an hour of searching and head scratching I figured that it must be web.config’s fault. I found a page that talks about updating your web.config for integrating the AJAX library into your site. Here it is:
I followed all the directions and like magic, my site works with AJAX now! Phew.