The key part of the stack trace is
"RegisterClientScriptResource(Control control, Type type, String resourceName) The action that failed was: Demand The type of the first permission that failed was: System.Security.Permissions.FileIOPermission The Zone of the assembly that failed was: MyComputer --- End of inner exception stack trace "
This indicates that there is an issue with the file system and the MS Ajax controls. MS Ajax requires full trust, so the website must either be running in full trust, or else the ms ajax controls must be installed in the GAC. In addition, for the controls to be loaded, it requires asp.net 2.0 or above, and must be a web application . I suspect that either
a) your website was a folder and not a virtual directory, an issue the automated installer fixed.
or
b) the automated installer installs MS Ajax as part of it's work (if it's not already installed)
All in all, it's very hard to see what caused the issues, good to see you've got it working now, and good luck getting any answers from godaddy - webhosting is such a small margin business at the low end they avoid spending any "unncessary" supporttime.
Cathal