I have an ASP.Net page with one update panel. I have set jQuery to $.mobile.ajaxEnabled = false;
The update panel in ASP.NET does not use AJAX in the traditional sense - it is more sort of "emulated ajax". In my ASP.NET webforms projects that use jQuery mobile, I let jQuery do the AJAX and I put the server-side code into web services.
You can't have it both ways, jQuery will work OK with ASP.NET AJAX but jQuery Mobile will not - you must choose between Microsoft AJAX without JQM or jQuery AJAX with JQM.
Of course, you could do it all much more cleanly with MVC but that will mean a rewrite.