Had some fun tracking this one down today, fortunately someone else had already done the hard work in working out how to fix it.
Essentially I was trying out a basic AJAX page in an existing 2.0 web application project. The various additional required sections were added to the web.config and I followed the Introduction to the UpdatePanel control, where a label is updated when you click a button.
Simple. Or so you'd think. No AJAX behaviour for me - it was performing a full postback.
Fortunately I managed to find a post from "Rick" that explained what the culprit was - the <xhtmlConformance mode="Legacy"/> in the web.config. Commenting this out gives the desired behaviour.
I must admit I haven't bothered investigating any further to work out why that works - feel free to let me know.
Found another post about this that explains a bit more from Scott Guthrie.