Hi,
could you please tell me, what approach you are using when developing your web site (ASPX page templates or Portal engine)? If you are using portal approach it is not necessary to modify anything and it should work. All you have to do is check "Use update panel" checkbox, described here
AJAX support But you could try to add this code snippet into your web.config file to make ajax works:
<httpHandlers>
<remove verb="*" path="*.asmx"/>
<add verb="*" path="*.asmx" validate="false" type="System.Web.Script.Services.ScriptHandlerFactory, System.Web.Extensions, Version=1.0.61025.0, Culture=neutral, PublicKeyToken=31bf3856ad364e35"/>
<add verb="*" path="*_AppService.axd" validate="false" type="System.Web.Script.Services.ScriptHandlerFactory, System.Web.Extensions, Version=1.0.61025.0, Culture=neutral, PublicKeyToken=31bf3856ad364e35"/>
<add verb="GET,HEAD" path="ScriptResource.axd" type="System.Web.Handlers.ScriptResourceHandler, System.Web.Extensions, Version=1.0.61025.0, Culture=neutral, PublicKeyToken=31bf3856ad364e35" validate="false"/>
</httpHandlers>
<httpModules>
<add name="ScriptModule" type="System.Web.Handlers.ScriptModule, System.Web.Extensions, Version=1.0.61025.0, Culture=neutral, PublicKeyToken=31bf3856ad364e35"/>
</httpModules>
If that does not work, you could try to develop this
simple custom web part and try to use update panel there, to see if the update panel works with simple web part.
Best regards,
Roman Konicek