I am having the same problem where responses from the server would freeze my ENTIRE BROWSER when coming through an updatepanel. Its only a problem in IE. IE7 freezes for 2 minutes, and then works fine. IE8 Beta only hangs for 6-7 seconds before resuming.
Firefox, as always, works like a charm. Blazing fast! Doesn't hang at all. And Loads the page instantly. ( + 1 Second for the 1st tab + 3 seconds for the remaing 8 tabs).
I tried System.Threading.Thread.Sleep(1); on the server (Page_Load) but to no avail.
Could you please elaborate on how you fixed it?
BTW, I am already running the app in Debug=False, Script Mode = "Release", Script compression = "True", Script Caching = "True".
In my application, I have a Ajax Toolkit Tab Control and I use Multiview to first load the page (without any Tab Contents), then, using a Timer, load the contents of the first Tab. And then, with another Timer, Load the remaining Tabs in one go.
Each tab contains around 50 - 100 CascadingDropDowns.
I know people would tell me to rethink the design and tell me I shouldn't be loading so many CascadingDropDowns on one page (10 Tabs x 100 Set of CascadingDropDowns x 4 DropDowns in each set = 4000 DropDowns with each DropDownList = approx 50 Entries)
I only use UpdatePanel for the initial incremental load of the page. Otherwise, the page never posts back. Its all implemented using WebMethods wrapped in Custom Extenders. And these WebMethods use Get Requests instead of Post to make them Browser Cachable (and Versionable using query string params). (Security is not an issue here

)
The business doesn't want to divide the tabs as separate pages or wait for a round trip to the server when switching tabs. And with IIS Compression enabled, bandwidth is not a problem because this 2MB beast is reduced to a 60Kb page.
I can't use Firebug to debug because its only happening in IE.
I used PageRequestManager's events and found out that in PageRequestManager.PageLoading, IE7 hangs for 2 minutes just after loading the page (i.e., injecting the response XML into the DOM) and running all the scripts / behaviours of the CustomExtenders.
Firefox straight away fires the PageRequestManager.PageLoaded event after the scripts on the Delta page (from ASyncPostback) complete. But IE hangs for 2 minutes after loading the delta page and running the scripts.
Any ideas?
Just wondering if your "delayed response from server" hack would work.
Thanks