A few days ago, I found unexpected problem with using Atlas in one of applications. No matter what I've done, UpdatePanel gives me "Unknown Error" message. I had this before and thought it is problem somewhere deep in application, but this time was different. Atlas was working well unless I've added url rewriting feature to the application, so this time I knew where problem could be.
After a few tests, I found a problem. As a part of url rewriting feature I have actionless form to keep nice url after postback and it seems that somehow the action in the form is required by Atlas. Removing url rewriting is not an acceptable solution, so I had to find another one - just replace the action attribute with rewritten nice url. Atlas works fine and postbacks are going to nice url too.
HTH