The only downside of using jQuery with ASP.Net is the lack of integration. They now include a vsdoc file which helps with Intellisense, but there’s a long way to go. For simplicity, I’m still using Microsoft’s AJAX code for their page methods and UpdatePanels, and primarily using jQuery for the client side controls and animations.
I’ve written a library to help with the creation of ASP.Net server controls that utilize jQuery. I’m calling it, very creatively, jQuery.Net. You can access the code and binaries for the library on github, the link’s below.