Assembly 'AjaxControlToolkit, Version=3.0.30512.20315, Culture=neutral, PublicKeyToken=28f01b0e84b6d53e' uses 'System.Web.Extensions, Version=3.5.0.0,

Error Assembly 'AjaxControlToolkit, Version=3.0.30512.20315, Culture=neutral, PublicKeyToken=28f01b0e84b6d53e' uses 'System.Web.Extensions, Version=3.5.0.0, Culture=neutral, PublicKeyToken=31bf3856ad364e35' which has a higher version than referenced assembly 'System.Web.Extensions, Version=1.0.61025.0, Culture=neutral, PublicKeyToken=31bf3856ad364e35'

The solution worked for me is...
1) I changed target framework to 3.5 in all the projects in my solution
2) Clean all the projects in the solution
3) Rebuild the full solution
4) Open the web.config file and remove the content
<runtime >
<assemblyBinding xmlns="urn:schemas-microsoft-com:asm.v1">
<dependentAssembly>
<assemblyIdentity name="System.Web.Extensions" publicKeyToken="31bf3856ad364e35">
<bindingRedirect oldVersion="1.0.0.0-1.1.0.0" newVersion="3.5.0.0">
</dependentAssembly>
<dependentAssembly>
<assemblyIdentity name="System.Web.Extensions.Design" publicKeyToken="31bf3856ad364e35">
<bindingRedirect oldVersion="1.0.0.0-1.1.0.0" newVersion="3.5.0.0">
</dependentAssembly>
</assemblyBinding>
</runtime>
and save.
5) Now close the Visual Studio 2008 and open again, clean the full solution and rebuild.
oooorey It worked :)
Hope this may help someone.