Using jQuery for AJAX with ASP.NET Webforms
The most complete article I've ever found about this topic
http://www.codeproject.com/KB/ajax/AjaxAndAspNET.aspx
It avoids update panel, script manager and viewstate.
Here are few links:
A Look Into JQuery APIhttp://gridviewguy.com/Articles/407_A_Look_Into_JQuery_Ajax_API.aspx
Using FireBug Profiler to Dig Deep into MS AJAX and JQuery APIhttp://azamsharp.com/Posts/83_Using_FireBug_Profiler_to_Dig_Deep_into_MS_AJAX_and_JQuery_API.aspx
On Demand Loading Using JQuery Ajax API http://azamsharp.com/Posts/74_On_Demand_Loading_Using_JQuery_Ajax_API.aspx
Damien Edwards just gave an awesome talk on this topic at the recent MIX11 conference. You can watch the video online and download his code. He developed a jquery-UI extenders project that works the same way that ASP.NET AJAX toolkit works, but just extends normal controls/tags/elements with jQuery functionality. The project is on CodePlex.