I have followed the directions of every thread I have found on these boards and am still having this issue. I have added the reference, shut down Visual Studio, restarted and the same thing. I had no problems yesterday doing a tutorial project but am having the issue today.

EDIT

I deleted the AJAX controls and re-installed fresh and it is now working

Hi Robert,

I am glad that you have managed to resolve the issue yourself.

Please note that in such cases it is not required to reinstall the controls entirely. You could refer to the following topics where possible solutions to similar problems are described:
 http://www.telerik.com/help/aspnet-ajax/introduction-troubleshooting.html
 Design-time Troubleshooting
 http://www.telerik.com/help/aspnet-ajax/introduction-troubleshooting-skins.html

I hope this helps.

All the best,
Eyup
the Telerik team