Change:
<ajaxtoolkit:toolkitscriptmanager id="ScriptManager1" runat="server" xmlns:ajaxtoolkit="#unknown" />
To:
<asp:scriptmanager id="ScriptManager1" runat="server" xmlns:asp="#unknown" />
Check how you register the assembly, must be like:
<![CDATA[<%@ Register assembly="AjaxControlToolkit" namespace="AjaxControlToolkit" tagprefix="cc1" %>]]>
The real fix is to install .net 3.5 sp1 and can be found here (Ajax Control Toolkit expects a .net 3.5 SP1 runtime environment):
http://www.microsoft.com/downloads/details.aspx?familyid=ab99342f-5d1a-413d-8319-81da479ab0d7&displaylang=en[
^]
Good luck!