I'm actually quite relieved to see some opinions here agreeing with my own: ASP.NET as a template language is very poor.
I'd just like to rebut a couple of the pro points made here (flamesuit on!):
Dave Ward mentions ID collisions - this is true, but my how badly handled. I would have preferred to see nodes referenced by xpath or deep css selectors than by making the ID effectively useless except by deferring to ASP.NET internals like clientID - it just makes writing CSS and JS that much harder pointlessly.
Rob Cooper talks about how the controls are a replacement for HTML so it's all fine (paraphrasing, forgive me Rob) - well it's not fine, because they took an existing and well understood language and said "no, you have to do things our way now", and their way is very poorly implemented. e.g. asp:panel renders a table in one browser and a div in another! Without documentation or execution, the markup for a login control (and many others) isn't predictable. How are you going to get a designer to write CSS against that?
Espo writes about how controls give you the benefits of abstraction if the platform changes the html - well this is clearly circular (It's only changing because the platform is changing, and wouldn't need to if I just had my own HTML there instead) and actually creates a problem. If the control is going to change with updates again how is my CSS supposed to cope with that?
Apologists will say "yes but you can change this in the config" or talk about overriding controls and custom controls. Well why should I have to? The css friendly controls package meant to fix some of these problems is anything but with it's unsemantic markup and it doesn't address the ID issue.
It's impossible to implement MVC (the abstract concept, not the 3.5 implementation) out of the box with webform apps becuase these controls so tightly bind the view and control. There's a barrier of entry for the traditional web designer now because he has to get involved with server side code to implement what used to be the separate domains of CSS and JS. I sympathise with these people.
I do strongly agree with Kiwi's point that controls allow for some very rapid development for apps of a certain profile, and I accept that for whatever reason some programmers find HTML unpleasant, and further that the advantages the other parts of ASP.NET give you, which requires these controls, may be worth the price.
However, I resent the loss of control, I feel the model of dealing with things like classes, styles and scripting on the codebehind is a wrongheaded step backwards, and I further feel that there are better models for templating (implementation of microformats and xslt for this platform) although replacing controls with these is non-trivial.
I think ASP.NET could learn a lot from related tech in LAMP and rails world, until then I hope to work with 3.5 MVC where I can.
(sorry that was so long </rant>)