I got Atlas and Scriptaculous working together and posted a demo on my blog: http://smarx.com/posts/atlasculous-atlas-and-scriptaculous-working-together.aspx.

Wow, i cannot wait to get home tonight and see if this works for everyone:
"The only trick turned out to be changing the order of JavaScript includes"

I've been pulling my hair out of my head for the past few nights dealing with UpdatePanel and my MasterPage from PWS, but seeing this post made me realize that i am using Scriptilicous in my Lightbox-image stuff...

So hmmm.... i seem to have everything working....

On my local version of my website, i now have Atlas, Lightbox2, and Submodal all working in harmony  :-)