See also the explanation here:
http://forums.daypilot.org/Topic.aspx/3328/which-java-script-files-and-functions-are-absolutely-essent
1. The source page using UpdatePanel should be no problem (you open the modal using manual JavaScript).
2. There might be a problem with the target page if you want to use the server-side helper to close the modal dialog. The UpdatePanel intercepts PostBacks and the helper may not work properly.
You should be able to close the modal dialog from the server-side using ScriptManager.RegisterStartupScript:
ScriptManager1.RegisterStartupScript(typeof(Page), "close", "parent.DayPilot.ModalStatic.close();");