I found a bug in the September 30, 2009 release of the AJAX Control Toolkit. When you press a button that is inside of a Modal Popup dialog box it will cause a full page postback instead of a partial postback. When I reverted to the May 13, 2009 release this did not occur.
By the way, I also ran into another weird issue on the September 2009 release where random commas were being inserted into my text box on each postback. If you are having this issue I also recommend reverting to the May 2009 release.