simple to implement this functionality.. it's nice feature thanks to Ajax team.
Step 1:
Create one xml file with the following attributes with tag. these are the attribute and tag will describe the functionality.
<Image TileSize="256" Overlap="1" Format="png" ServerFormat="Default">
<Size Width="1024" Height="768"/>
</Image>
Step 2:
create css class with image.
step 3:
<ajaxToolkit:Seadragon ID="Seadragon"
runat="server"
SourceUrl="sample.xml"> //Step1
CssClass="seadragon" //step 2
<ajaxToolkit:Seadragon>