Hi,
To be able to use Ajax extensions and ajax toolkit controls , you msut be using at least ASP.NET 2.0 .
So you have to migrate to version 2.
If you decided to migrate to version 2.0 , then you can follow the steps in the link below:
(Note: The first step doesn't required if you have VS 2005 with SP1 , because Web applicaiton support is now included in sp1)
http://webproject.scottgu.com/CSharp/Migration/Migration.aspx
If you still want to use .NET 1.1, you may consider using third party or open soruce ajax libraries.