Here is a simple working example explaining how to use ShowModalDialog and asp.net with Visual Studio 2005.
Start with default.aspx, which has a single button. Once clicked, it will popup a modal window which will show a single button labeled "Close me!".
The postback will redirect the user to a new page, whose purpose is to close the modal window and return the string value '1' which will be evalueted by the parent window using the returnValue property.
If returnValue is '1' then the form will be submitted to itself, just to show how to reuse local values and force a timer label to refresh
Download the example from here