In Version 30930, the popup extender will duplicate the contents of the popup control when it is contained w/in an UpdatePanel. This can cause issues if the popup contains form fields, since they'll be duplicated and submitted as a comma-separated list.
Extract the attached zip file, open web site w/ the folder selected in VS 2008 & run it to reproduce the issue. Click either Target Control link, add text to the input, click "Add" on the popup, then click the second Target Control link & Add button to see the comma-separated list of values that's generated because of the duplicated controls. Seems the popup extender within the update panel is rebinding without removing the previous popup controls.
This is a major regression from the previous version. We've confirmed that downgrading to the May release fixes this bug.
Thanks for your efforts on the Toolkit. Aside from this bug, it's been a pleasure to work with.