I was having trouble with a new AJAX enabled code so I tried to just to do a simple test page. I did the simple Label control with button example covered in this tutorial http://www.asp.net/learn/ajax/tutorial-01-cs.aspx
I'm having the same problem. Functionalitw-wise it works but the page is refreshing and flickering. That means it's not the code but maybe my set up. I'm using VisualStudio 2005 and the application is currenty .NET 2.0. In VS.NET, I do see the AJAX controls though. What could this be?
Now, it's AJAXing! I was missing the necessary references in the web.config file.
I've added them into my web.config and now everything is working fine!