I found a way to resolve this issue the ambiguous assembly issue that has worked for several projects I have worked on over the last year. If you have access to both Visual Studio 2005 and 2008 you can use those tools to upgrade a 2.0 web config to 3.5. What I do is create a new web project in 2005, copy the web.config from my project over the web.config in the new 2005 project, then open the 2005 project in 2008. You will be prompted to upgrade the 2005 / ASP.Net 2.0 project to 2008 / ASP.Net 3.5. Convert the project and it should work.
If you need an empty 2005 project, let me know, and I should be able to create one and post it on my website for you to download. It's a hack but it has work really well for me.
AJAX is definitely worth learning to use. However, I would strongly recommend you learn how it is supposed to work and not just use UpdatePanel controls everywhere. I did that for a few projects before I found out the overhead and inefficiency involved. When you use an update panel, the entire page is re-rendered on the web server for every event - every button click, etc. Then just the update region is sent to the browser. The ViewState can be very large for even small pages because the state of all the controls, even ones not affect by the content inside the UpdatePanel needs to be passed from client-to-server AND server-to-client for every event.
For some of my newer projects I have abandoned most of what ASP.Net does for client-side JavaScript code using JQuery and passing data back and forth in JSON format. I'm basically coding in a different language and doing everything the hard way, but it is very fast and efficient. For smaller projetcs I still use ASP.Net and UpdatePanels. It's all a matter of trade-offs and what fits best for a project.
-Pat