I could not completely understand your configuration and whether you are using .NET 2.0 and VS 2005 or .NET 3.5 and VS 2008. If you are using the VS 2005 with .NET 2.0 you should download teh mentioned Ajax Extensions assembly and reference it in your project. If yiou have already installed it, you should have a new template site added - you should create a new AjaxEnabledWebSite and everything should work fine. The Telerik.Web.UI.dll you should use is from the Bin
folder of the pacjage.
If you are using .NET 3.5 with VS 2008, you do not need to download anything - AJAX is enabled by default in this case. All you should do is to make sure that you have used the Telerik.Web.UI.dll from the Bin35
folder of the installation package.
It is important to pay attention from which folder you take the Telerik.Web.UI.dll because, e.g if you put the dll from the Bin35 folder in an ajax enabled .NET 2.0 site, you will get error messages.
I hope that my explanations are helpful, in case you experience any further problems, do not hesitate to contact us again!
All the best,
the Telerik team