You are talking of a
Cascading Dropdown. Just Google/CP Search for it.
What you are looking for is populating a second dropdown based on the value selected in first dropdown.
Earlier it was Server side, then traditional AJAX==XMLHttpRequest. Now, we can use Update panel or PageMethod for it.
If not anything else,
Ajaxtoolkit has a cascading dropdown[
^] control.
Look at this article too:
AJAX Cascading Dropdown Example using SQL Database[
^]