One Update Panel vs. Multiple Update Panels [closed]
Multiple panels are much better. One of the main reasons for using UpdatePanels at all is to reduce the traffic and to only send the pieces that you need back and forth across the wire. By only using one update panel, you're pretty much doing a full post back every time, you're just using a little Javascript to update the page without a flicker.
If there are pieces of the page that need to be updated together, there are ways to trigger other panels to update when one does.. but you should definitely be using multiple update panels.
I'd caution that with multiple update panels you'll want to be careful. Make sure you set the UpdateMode to Conditional. Otherwise, when one update panel is "posted back" to the server, all of them are posted back.
I'd highly suggest using these tools
Web Development Helper (here's a brief tutorial Web Development Helper and ASP.NET Ajax)
Any of these answers don't mentioned maintainabiliy comparison between the choices. Third options is that you don't use any update panel and leave your self to the reverse ajax. Check out the interesting projects: PokeIn and VisualJS.NET