change your code
$(document).ready(function () {
$("#btnSubmit1").click(function () { $("#txtbox1").hide(); });
});
with this code
$(document).ready(function () {
$($get('<%= btnSubmit1.ClientID %>')).click(function () { $("#txtbox1").hide(); });
});
you must to add your page scriptmanager control in i a serverside form because of getting serverside controls in javascript code block.
<form id="form1" runat="server">
<asp:ScriptManager ID="ScriptManager1" runat="server">
</asp:ScriptManager>
<div>
<p>
<input id="Text1" type="text" />
</p>
<asp:Button ID="btnSubmit1" Text="test34" runat="server" />
</div>
</form>
but this isnt best solution for what you want to do. Serverside buttons will create a post from client to server. when you clicked your buttons it will hide your inputs but after post you will see it doesnt effect.
my advice only about calling a serverside control from javascipt. your way doesnt a good way for hiding any control.