I would recommend changing your AJAX call URL to this:
url: "Service.asmx/HelloWorld",
The reference to the local host would not bode well when published to IIS.
[EDIT]
Change your service to this:
[WebMethod]
[ScriptMethod(ResponseFormat = ResponseFormat.Json)]
public string HelloWorld() {
JavaScriptSerializer serializer = new JavaScriptSerializer();
string jsonData = serializer.Serialize("Hello World");
Context.Response.ContentType = "application/json; charset=utf-8";
Context.Response.Write(jsonData);
return jsonData;
}