How does LiveControls handle ViewState?
With the release of v1.4 of LiveControls, ViewState management has been optimized to increase performance while reducing bandwidth and providing maximum flexibility in your application design. By default, control and page level ViewState is available and can be altered within the context of a callback. At the same time, the encoded and often cumbersome ViewState is not transferred between the client and server, thereby saving on bandwidth and increasing application performance. These improvements are even more pronounced in pages using many controls, or when using complex controls such as the LiveDataGrid with many rows and columns. Optionally, LiveControls may also be configured to send encoded ViewState between the client and server in each callback.