There is no installer available for the Ajax Control Toolkit. You have to configure it manually. Here are the following steps to correctly install the toolkit.

- Unpack the AjaxControlToolkit-Framework3.5-NoSource.zip file to a local directory. You can download it here:

http://www.codeplex.com/Wiki/View.aspx?ProjectName=AjaxControlToolkit

- Create a "Microsoft ASP.NET" directory at the following path:

C:\Program Files\Microsoft ASP.NET

- From the unpacked files, copy the following files to the:

C:\Program Files\Microsoft ASP.NET 

directory:

\AjaxControlExtender\AjaxControlExtender.vsi

\SampleWebSite\Bin\AjaxControlToolkit.dll

- Make sure all instances of Visual Studio 2008/2005 are closed before proceeding.

- Double-click the AjaxControlExtender.vsi file to run the installation of the controls. NOTE: Sometimes this works and sometimes this doesn't actually add the controls to your toolbox.

To Check if the controls are installed in the Toolbox

Open up Visual Studio 2008 with a solution that contains a web project. Double-click on an .ASPX page in the project. Go to Design view for the HTML page. Open the Toolbox side bar. You should see a new node called "AJAX Control Toolkit". If this node appears, everything is installed and ready to go.

To Add the controls to the Toolbox manually

If this node does not exist, you need to add it manually. Right-click the Toolbox side bar and select "Add Tab". Enter the name "AJAX Control Toolkit" in the edit box. Now right-click this new tab and select "Choose Items". Now wait for the slowest dialog known to man...

Click the "Browse" button and select the file at:

C:\Program Files\Microsoft ASP.NET\AjaxControlToolkit.dll

This will auto-select all the checkboxes for the controls in this DLL. Click OK and they will be added to your toolbox. Everything is now installed and ready to go.