Well, I've got the web.config settings, these are the two tag prefixes I have in my web.config:
<add tagPrefix="asp" namespace="System.Web.UI" assembly="System.Web.Extensions, Version=3.5.0.0, Culture=neutral, PublicKeyToken=31BF3856AD364E35"/>
<add tagPrefix="asp" namespace="System.Web.UI.WebControls" assembly="System.Web.Extensions, Version=3.5.0.0, Culture=neutral, PublicKeyToken=31BF3856AD364E35"/>
Do they look right? Am I missing one? I've also got the script manager. What is the reference you added to the project?