I have an issue that just recently started;
If I restart my webserver, and a new user visits, it works correctly.
Close the browser and go back to the site, the site never finishes loading (it appears to be doing a post back to itself constantly).
I am not sure if AjaxToolkit.dll is the problem, but I had a similiar issue with the latest version, so I had to use slightly older to get anything to work.
Any clues as to where I should look to solve this, it seems to work fine on my dev server.