No, that is a different behavior.  My page loads fine.  The panels show up the way they are suppose to.  I will try to explain my problem in a little more detail...

Inside each of my panels are gridviews.  When I click on the gridview buttons (new, edit, delete),  the screen goes white, and the entire page is rebuilt.  If I remove the CollapsiblePanelExtender tag, then the UpdatePanel features work, and only the gridview is rebuilt.   Below is a code snippet of what I'm doing.  My UpdatePanel is around the ContentPlaceHolder tag on my master page, and is not shown here.        

                                            <asp:Panel ID="pnlPosFund_Header" runat="server" SkinID="pnlHeader" Height="0px" Width="300px">
                                                <div style="cursor: pointer; vertical-align: middle;" width="100%" class="Separator">
                                                    <asp:Label ID="lblPosFund_Title" SkinID="lblHeader" ForeColor="White" Font-Size="12px"
                                                        runat="server" Width="50%">Funds</asp:Label>
                                                    <!--<asp:Label EnableTheming="false" ID="lblPosFund_Toggle" ForeColor="White" Font-Names="arial" Font-Size="10px"  runat="server">(Show Details...)</asp:Label>&nbsp&nbsp&nbsp-->
                                                    <asp:Image ID="imgPosFund_Toggle" align="right" valign="top" runat="server" ImageUrl="~/images/expand_blue.jpg" />
                                                </div>
                                            </asp:Panel>
                                            <asp:Panel ID="pnlPosFund_Content" runat="server" SkinID="pnlContent">
                                                <asp:GridView ID="gvPosFund" runat="server" CellPadding="1" DataSourceID="clsPosFund"
                                                    AutoGenerateColumns="False" GridLines="Horizontal" DataKeyNames="FundID" PageSize="5">
                                                    <Columns>
                                                        <asp:TemplateField InsertVisible="False" ShowHeader="False">
                                                            <EditItemTemplate>
                                                                <asp:ImageButton ID="ImageButton1" runat="server" CausesValidation="True" CommandName="Update"
                                                                    ImageUrl="~/images/save.png" Text="Update" /> <asp:ImageButton ID="ImageButton2"
                                                                        runat="server" CausesValidation="False" CommandName="Cancel" ImageUrl="~/images/Edit_Undo.png"
                                                                        Text="Cancel" />
                                                            </EditItemTemplate>
                                                            <FooterTemplate>
                                                                <asp:ImageButton ID="btnPosFundNew_Update" runat="server" CommandName="Insert" ImageUrl="~/images/save.png"
                                                                    ToolTip="Insert" /> 
                                                                <asp:ImageButton ID="btnPosFundNew_Cancel" runat="server" ImageUrl="~/images/Edit_Undo.png"
                                                                    OnClick="btnPosFundNew_Cancel_Click" ToolTip="Cancel" />
                                                            </FooterTemplate>
                                                            <ItemTemplate>
                                                                <asp:ImageButton ID="ImageButton1" runat="server" CausesValidation="False" CommandName="Edit"
                                                                    ImageUrl="~/images/EditInfo.png" Text="Edit" />
                                                            </ItemTemplate>
                                                            <HeaderTemplate>
                                                                <asp:ImageButton ID="btnPosFund_New" runat="server" ImageUrl="~/images/New.png" ToolTip="Add New Fund"
                                                                    OnClick="btnPosFund_New_Click" />
                                                            </HeaderTemplate>
                                                        </asp:TemplateField>                                                                                              
                                                    </Columns>
                                                    <FooterStyle Wrap="False" />
                                                </asp:GridView>
                                            </asp:Panel>
                                            <atlasToolKit:CollapsiblePanelExtender ID="atlPanelPosFund" runat="Server">
                                                <atlasToolKit:CollapsiblePanelProperties TargetControlID="pnlPosFund_Content" ExpandControlID="pnlPosFund_Header"
                                                    CollapseControlID="pnlPosFund_Header" Collapsed="False" TextLabelID="lblPosFund_Toggle"
                                                    ExpandedText="(Hide Details...)" CollapsedText="(Show Details...)" ImageControlID="imgPosFund_Toggle"
                                                    ExpandedImage="~/images/collapse_blue.jpg" CollapsedImage="~/images/expand_blue.jpg"
                                                    SuppressPostBack="false" />
                                            </atlasToolKit:CollapsiblePanelExtender>

In any standard, non-Atlas website, when you click a button or link, the whole page is reloaded, causing the screen to go blank, then be rebuilt (flicker).  This went away once I enabled Atlas on my website.  When I clicked on a button, the events fired, and only the controls on the page that needed to be updated were reloaded, giving the behavioral appearance of a client application instead of a web based application.  This flicker behavior reappeared once I added the CollapsiblePanelExtender to my page.

Yes, this does seem to be an IE6 bug.  It worked in Firefox.  I am downloading IE7 now, and will post my results once I try it.

Thanks for your help!

I downloaded IE7 (beta).  It did fix the page refreshing issue, so it seems to be an IE6 issue.  However, just about everything else broke.

Dropdownlists did not render

Panels did not format properly

CollapsiblePanelExtender did not collapse / expand anymore

If any type of warning or error message popped up, IE7 crashed.

Gridviews did not render properly.

I would not recommend trying IE7 until it is fully functional with Atlas and .net 2.0.

It looks as though there is not a fix for this as of yet.  I will be removing the CollapsiblePanels from my application until all the bugs are worked out.  Thank you for your assistance. 

Well, this is my third attempt to enter this post.  The first two I tried from IE7 beta 2.  The first time, the browswer crashed and froze my system, and I had to do a hard reboot.  The second time I switched to another application, and tried to re-open the browswer window, and it froze.  I had to uninstall IE7 and rollback to IE6 to post this message.  Anyway, I thought I would post my current versions in case anyone else had these issues:

Computer: Dell GX270 P4 3.2 GHz 2GB RAM
Video Card: nVidia GeForce FX5200 driver version 7.7.7.2

OS: Windows XP SP2 5.1.2600
Visual Studio 2005 Standard 8.0.50727.42
SQL Server 2005 Standard 9.00.1399.00
.net Framework 2.0.50727.42

Hi, I'm experimenting the same problem.

I'made a page with an updatepanel with partial rendering enabled, when i use CollapsiblePanelExtender for a panel inside UpdatePanel partial rendering does not work anymore, and the page revert at the standard behaviour, as if scriptmanager has Enablepartialrendering="false".

 It is a known issue?

Gian Mria.

in the collapsiblePanel there exists a property called suppresspostback, set that to true.

Try adding target panels style  by adding  

style="height:0px;overflow:hidden;"

It worked for me!!