At first I was seeing the loading panel on the first postback but never again and in certain configurations based on examples, I did not see it appear at all.Finally, I was able to get it all to work within Share Point. Lable1 present inside the update Panle and Label2 is in the outside of update Panel.below is the code block for above scenarios methods we can register any control with the Particular Page Script Manager Instance. The page Loaded event is raised after all content on the page is refreshed, either because of a full-page postback or an partial postback. We need to write below code in client side which will update the content values. This args conatins the data items for the registred controls.While registering we need to provide the Control name along with the data item for the control which we want to render. we can call args.get_data Items()to retreive the data from the dataitem collections.If we click on Button1 now, it will update the text of Label1, but though we have registered the Label2 with the script manager still its value will not be reflect. After that we have set the Control Value by from the data item collection using .As I said above, I think the key was wrapping the Ajax Manager and the Rad Grid within a Rad Ajax Panel which was not needed or shown in the Telerik demos.
But, The problem may come when we want to update the controls which are outside of Update Panel and we need to update the same while updating then control inside updatepanel. Now, our requirement is to update the Label2 while we are updating Label1 by Clicking Button1.I implemented a Rad Grid which contained two levels of information within a user control that is being rendered in Share Point (MOSS 2007).I therefore used coding and markup as explained on the Telerik demo site here.Adding these controls to a page eliminates the need to refresh the whole page with each postback.Only the contents of the Update Panel control will be updated. NET AJAX controls require specific settings in a web.config file in order to function correctly.