Hi Bbaxter,
Based on my test, calendar works fine when it is inside an UpdatePanel. The Calendar won't close automaticlly if it is not fired by PopupButtonID.It is not a UpdatePanel issue. Here is the sample that works fine inside the UpdatePanel.
<%@ Page Language="C#" %>
<!DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd">
<script runat="server">
</script>
<html xmlns="http://www.w3.org/1999/xhtml">
<head runat="server">
<title>Untitled Page</title>
</head>
<body>
<form id="form1" runat="server">
<asp:ScriptManager ID="ScriptManager1" runat="server">
</asp:ScriptManager>
<asp:UpdatePanel ID="UpdatePanel1" runat="server">
<ContentTemplate>
<asp:TextBox ID="TextBox1" runat="server"></asp:TextBox>
<ajaxToolkit:CalendarExtender ID="CalendarExtender1" runat="server" TargetControlID="TextBox1"
Format="yyyy-MM-dd" PopupButtonID="Button1">
</ajaxToolkit:CalendarExtender>
<asp:Button ID="Button1" runat="server" Text="Calendar" />
</ContentTemplate>
</asp:UpdatePanel>
</form>
</body>
</html>
I hope this help.
Best regards,
Jonathan