Asp.Net team has released new updated of MS Ajax library that includes (As ScottGu stated):
- Better Imperative Syntax: A new, simplified, code syntax for creating client controls.
- Better jQuery Integration: All Microsoft Ajax controls are now automatically exposed as jQuery plug-ins.
You can read more about it here.
Other optimization tools that you might try:
- Telerik RadCompression http://www.telerik.com/products/aspnet-ajax/compression.aspx
- Microsoft Ajax Minifier http://aspnet.codeplex.com/Release/ProjectReleases.aspx?ReleaseId=34488
- MonoSoftware WAO http://www.mono-software.com/Pages/Web-Application-Optimizer.aspx
- Alachisoft nCache http://www.alachisoft.com/ncache/