I don't know what the error means but try a simple test. Copy the code
below and see if you get the same error. This works on my machine.

Default.aspx

<%@ Page Language="C#" AutoEventWireup="true"
CodeFile="Default.aspx.cs" Inherits="_Default" %>

<!DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://
www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd">

<html xmlns="http://www.w3.org/1999/xhtml";>
<head runat="server">
    <title></title>
    <script type="text/javascript">

      function pageLoad() {
      }

    </script>
</head>
<body>
    <form id="form1" runat="server">
    <div>
        <asp:ScriptManager ID="ScriptManager1" runat="server" />

                <asp:UpdatePanel ID="UpdatePanel1" runat="server">
                        <ContentTemplate>
                                Time 1:<asp:Label ID="lbl_time1" runat="server" 
/>
                                <asp:Button ID="btn_updateTime"
                                runat="server" Text="Update Time 1"
onclick="btn_updateTime_Click" />
                        </ContentTemplate>
                </asp:UpdatePanel>

        Time 2:<asp:Label ID="lbl_time2" runat="server" />

    </div>
    </form>
</body>
</html>

Default.aspx.cs

using System;
using System.Collections.Generic;
using System.Linq;
using System.Web;
using System.Web.UI;
using System.Web.UI.WebControls;

public partial class _Default : System.Web.UI.Page
{
    protected void Page_Load(object sender, EventArgs e)
    {
                lbl_time1.Text = DateTime.Now.ToLongTimeString();
                lbl_time2.Text = DateTime.Now.ToLongTimeString();
    }
        protected void btn_updateTime_Click(object sender, EventArgs e)
        {
                lbl_time1.Text = DateTime.Now.ToLongTimeString();
        }
}

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