Just a quick note more for my future reference more than anything else.
To get ASP.NET AJAX 1.0 to work with Sitecore you need to add the following to the ignoreurls section in your web.config
<setting name="IgnoreUrlPrefixes" value="/trace.axd|/sitecore/shell/Editor|/sitecore/admin/upgrade/|UnhandledException.aspx|/webresource.axd|/ScriptResource.axd"/>
to convert an existing web application to use AJAX.NET which you can find a tutorial on over here