ASP.NET AJAX is come a long way since its inception a few years back and my personal take it is that it in a hype cycle right now, where everyone is trying to jump on-board and create AJAX based applications. Needless to say that it has its own benefits, but there definite downsides to it as well. You can read a set of 10 important aspects around AJAX here.
It is known that though it gives a flicker free UX, the under-the-hood story tells a different tale. Having read about it, some days back, we did a small experiment to really see the kind of differences one can get with different approaches and you can read about our findings in this report (Download file). The scenario we took is very simplistic, but the results are still eye-opening.