The full error is
The base class includes the field \'ScriptManager1\', but its type (System.Web.UI.ScriptManager) is not compatible with the type of
Had a similar problems updating from 3.5 to 4.0. In my case, there is a root website, and virtual IIS application directories underneath this.
The code worked fine in my development and staging areas.
As soon as it went onto the production server, it crashed. Even though the code was the same.
My solution was to delete the virtual directory and recreate it. Making sure that the application pool is correct, and the asp.net version is correct. (my servers are Windows server 2003 with IIS6).
One other important note - you cannot run multiple asp.net versions in the same application pool.