Atlas architecture diagram posted by Nikhil, which shows Atlas as a well thought out architecture as opposed to “yet another AJAX library.”
In Nikhil's own words:
“Atlas is designed to be an end-to-end application framework spanning client and server development, and the communication between the two. In addition it provides an application framework that enables developers to put together components, and wire them up together. It can be used both declaratively (using XML-script) and imperatively (using JavaScript). Finally it addresses how script functionality can be integrated into asp.net apps as well as HTML pages in a clean, and unobstrusive manner.”

Here is Microsoft's description ( http://atlas.asp.net/ ) of Atlas:
ASP.NET “Atlas” is a package of new Web development technologies that integrates an extensive set of client script libraries with the rich, server-based development platform of ASP.NET 2.0. “Atlas” enables you to develop Web applications that can update data on a Web page by making direct calls to a Web server — without needing to round trip the page. With “Atlas”, you can take advantage of the best of ASP.NET and server-side code while doing much of the work in the browser, enabling a richer user experience.
ASP.NET “Atlas” includes:
- Client script libraries that provide a complete solution for creating client-based Web applications. The client script libraries support object-oriented development, cross-browser compatibility, asynchronous calls to Web services, and behaviors and components for creating a full-featured UI.
- Web server controls that provide a declarative way to emit markup and client script for "Atlas" features.
- Web services, such as ASP.NET profiles, that can add useful server-side features to an "Atlas" application.
Other Posts on AJAX and Atlas: