Had a few issues running a 1.1 site on Windows 2003. Things I did to resolve the issues:

• Made sure v1.1 was selected in the ASP.NET tab in IIS Manager for that site. That fixed the issue with ASP.NET not sending the aspnet_client files to the browser.
• Made sure the \aspnet_client\system_web\1_1_4322 files were in the wwwroot directory for that site. Also copied the latest versions of the js files from C:\WINDOWS\Microsoft.NET\Framework\v1.1.4322\ASP.NETClientFiles into the \aspnet_client\system_web\1_1_4322 wwwroot folder. That resolved the issue where no postbacks were occurring due to an old bug w/ client side validation, discussed on Thomas Freudenberg's blog.
• Was getting a weird error "CS0016: Could not write to output file 'c:\WINDOWS\Microsoft.NET\Framework\v1.1.4322\Temporary ASP.NET Files\xxxxx'. The directory name is invalid." Turns out the TEMP & TMP environment values were set to a user-specific account. KB825791 gives the fix .. basically changing the environment values and ensuring that the ASPNET and NETWORK SERVICE accounts have full rights to the temp directory.

Now it works. :)