ASP.NET AJAX Control Toolkit & UpdatePanel

All seems to me that ASP.NET AJAX Control Toolkit has a builtin feature that is able to deal by itself with all Ajax issues. That said, then wouldnt we need to use UpdatePanel anymore, since all these controls know how to deal with Ajax?

it is true that the control toolkit controls can update properly on their own. Like how you can use a calendar extender without needing it to be in a update panel with a textbox, they can both just be on the form. I still tend to user panels though simply because it helps me group sets of controls and visually makes it easy to see what kind of results i should expect when i know what controls are bound to what area on the screen. Using update panels has never cause me any extra problems so i stick with it

My fear is to make things redundant, and worse, degrade performance, since there would be 2 types of ajax treatment. One, dealt by UpdatePanel, and the other dealt by the control itself...

if you have you page up and running no problem without the use of update panels, then there is no need for them. It really comes down to how you have stuff set up I guess. I have pages with a lot of dynamically created controls like tables that are all updated individually (for when users edit them). And some of the editing features might include a calendar extender, so I would include that extender inside of the update panel that my table is in to group the controls because the interact with each other. But like i said, if your pages are set up in way that they work without update panels, then no worries :)