AJAX TOOLKIT ERROR: ".... requires a ScriptManager on the page"

Add folowing section, but please keep in mind that BOTH 1.0 and 3.5 assemblies System.Web.Extensions should be in GAC, in other case it will not work.

Add this to the Web.config

  <runtime>

    <assemblyBinding xmlns="urn:schemas-microsoft-com:asm.v1">

      <dependentAssembly>

        <assemblyIdentity name="System.Web.Extensions" publicKeyToken="31bf3856ad364e35"/>

        <bindingRedirect oldVersion="1.0.0.0-1.1.0.0" newVersion="3.5.0.0"/>

      </dependentAssembly>

      <dependentAssembly>

        <assemblyIdentity name="System.Web.Extensions.Design" publicKeyToken="31bf3856ad364e35"/>

        <bindingRedirect oldVersion="1.0.0.0-1.1.0.0" newVersion="3.5.0.0"/>

      </dependentAssembly>

    </assemblyBinding>

  </runtime>