The UpdatePanel is useful in situations where we only want a portion of the page to postback rather than the entire page. Such a limited postback is called a partial postback, and is easy to implement using the UpdatePanel.
Many ASP.NET controls can cause postbacks: Button controls, when clicked; DropDownLists and CheckBoxes, when their AutoPostBack property is set to True; and so on. Under normal circumstances, when these controls cause a postback, the entire page is posted back. All form field values are sent from the browser to the server. The server then re-renders the entire page and returns the complete HTML, which is then redisplayed by the browser.
When these controls appear in an UpdatePanel, however, a partial page postback is initiated instead. Only the form fields in the UpdatePanel are sent to the server. The server then re-renders the page, but only sends back the markup for those controls in the UpdatePanel. The client-side script that initiated the partial postback receives the partial markup results from the server and seamlessly updates the display in the browser with the returned values. Consequently, the UpdatePanel improves the reponsiveness of a page by reducing the amount of data exchanged between the client and the server and by "redrawing" only the portion of the screen that kicked off the partial page postback.
All of the GridView's rich functionality - paging, sorting, editing, and deleting - are accessible when its placed within an UpdatePanel without the need for any special code or instructions.
If GridView is in an UpdatePanel, actions that would normally cause a full postback - moving to the next page of data, sorting, editing, or deleting - instead result in a partial postback.