Well there is not much to say about this solution. Here is the screen that pops up.
Some sources on the Internet said that one needs to set the CombineScripts property to False, but I didn’t think that would be a solution, but rather a workaround. Then there was a solution offered by masterw that worked like a charm.
<asp:ScriptManager ID=”ScriptManager1″ runat=”server”>
<ajaxToolkit:ToolkitScriptManager ID=”ToolkitScriptManager1″ runat=”server”>
After I did this, the error stopped and my pages (and modal popup dialogs) started working again. If anyone has a nice explanation as to why this worked, please let me know in the comments.