Well All my systems have VS Team Studio on it.... as well as VS .(Visual Studio)..the issue is that there is a new dll... part of the ajax Beta 2 ..

Its located in: \Program Files\Microsoft ASP.NET\ASP.NET 2.0 AJAX Extensions\v1.0.61025 

Drag and drop it into your bin as it does not get GACed...the core does but apparently not the design dll...

Hope that solves the issue for others reading this and thanks for the feedback Sburke...

Also note: 

Problem:  New Beta 2 as did Beta MSI detects the other version and states - "Goto Control Panel - Add Remove Programs - and remove previous version".  Guess what?  There is no entry in the Add and Remove programs listing beyond the CTP.  Better have saved the previous bits - as you have to re-run the installer for Beta 1 to have the option to uninstall.  However, this may be a quirk because I use Team Studio?  I doubt that one...

Those will be the two biggest issues as far as installing and getting around things to get to the breaking changes for the all around Beta 2 bits for the core, ctp and toolkit 

see this post as well  http://forums.asp.net/thread/1455784.aspx