I upgraded my existing project developed in asp.net and .net extensions 1.0 to Ajax extensions that come bundled with asp.net 3.5 using Visual Studio 2008. After the upgrade I got compiler errors saying that the required assembly could not be found.
It turns out that on conversion Visual studio does not remove the reference to the AJAX extension for version 1.06 and hence the error.
In order to sort out this issue you need to go into project properties -> Reference tab and remove the reference System.Web.Extensions and create a new reference to the System.Web.Extension for the .net 3.5 dll located at \Program Files\Reference Assemblies\Microsoft\Framework\v3.5
alternately after removing the reference you can copy System.Web.Extensions.dll from from the 3.5 version to the bin directory of your project to sort out the issue.
Please note that if your project has any reference to the old System.Web.Extensions it will complain that there are two reference to System.Web.Extensions, in this case you can either remove older version of extensions from your system and deleted all temporary files in Windows temp and restart Visual Studio 2008, alternately make sure that all references to System.Web.Extensions to the older version are removed from your project.
For more details of how to upgrade project from .net 2 to .net 3.5 check out this post
Happy Coding 🙂