I found a combiniation of thing fixed my sys is undefined issue.  I have asp.net ajax beta 2 installed and after creating a AJAX web site i began getting the error.  After looking at this thread two things resolved my issue...

 initally the web.config had this line

<add verb="GET" path="Scriptresource.axd" type="Microsoft.Web.Handlers.ScriptresourceHandler" validate="false"/>

 I changed it to (Notice the capital R.  I have no idea if this was it but doing it worked for me)

<add verb="GET" path="Scriptresource.axd" type="Microsoft.Web.Handlers.ScriptResourceHandler" validate="false"/>

 also I had to have this in there once I turned authentication on.

<location path="ScriptResource.axd">
   <system.web>
      <authorization>
         <allow users="*"/>
      </authorization>
   </system.web>
</location>