>I attempted that:
>
>I pressed the HTML tab on the design surface and simply placed the tags before and after the datagrid definition.
>
>

><div style="height: 256px; overflow: auto">
>  <asp:.....
></div>
>

>However, at run time, the grid was no longer where I placed it on the form. I lost the ability to drag and drop the control. Was I correct in going to the HTML tab or is there a better way to to this?

This is what worked for me. Notice that I use the style attribute to get absolute position. (This was pre MM code)

<div style="Z-INDEX: 113; LEFT: 20px; OVERFLOW: auto; 
            WIDTH: 100%; POSITION: absolute; TOP: 205px; HEIGHT: 236px"
            id="DivDataGrid">
   <asp:datagrid id="grdTranslations" runat="server" 
       Font-Size="Smaller" Height="40%" 
       Width="100%"Font-Names="Arial Unicode MS" BorderStyle="Outset"
       ShowHeader="False" PageSize="100">
   </asp:datagrid>
</div>

My layout was set to Grid.