Hi,
The more you leave the Web Control paradigm, and the less viewstate you use, the simpler it will get, which is amazing but true. However, ASP.NET development shields us from HTML, CSS, and JavaScript, and few ASP.NET devs are prepared to immediately deal with them so directly, so taking the middle ground at first is probably best.
The good news is, ASP.NET 1.1 plays very well with jQuery and you can do anything you want, from avoiding web controls altogether and just using raw HTML with jQuery, to making full use of ASP.NET and sprinkling in just a little jQuery to, say, validate on the client and thereby avoid a postback.
An example of taking a middle route might be to create a normal datagrid, ideally off on a separate page, surrounded by only a form element (with runat=server removed), or perhaps just a div element, and serving it up via the jQuery ajax load method.
I personally do not use any of the Microsoft Ajax libraries. Every time I see people using them in samples, they seem to only complicate that which jQuery already does simpler and faster and better. This stuff is straightforward, don't make it ugly and slow by pulling in unnecessary MS libraries and using bulky XML without some really good reasons. I also personally remove all ViewState from all pages, and haven't yet found a case where ViewState did anything useful for me that wasn't simpler and more efficient just to handle directly. It turns out we never needed it, but Ajax sealed the deal. And the decrease in page size with corresponding increase in speed is a revelation. Living more fully in the actual web paradigm is so much simpler and better than living with leaky ASP.NET magic.
HTH.
Mike
P.S. Wow, everyone is coming on board to simpler, better web development: Controlling HTML in ASP.NET WebForms