how can i use a textbox with an update panel during textchange

the case is, everytime the textbox will be change it will trigger a process wherin it will look for the data in the databse, after that it will display the data to a grid. the textbox & grid are place inside the update panel. It's just I only want that portion to be refreshed.

When an update panel posts the page back - your entire page is reloaded on the server. The client however only redraws the portions you've specified inside the update panel.

To accomplish this, and fire off the ontextchanged event you're looking for - set your textbox like this

<asp:textbox id="txtSearch" runat="server" autopostback="true" />

Now keep in mind, that this will only fire when the textbox looses focus.