I have very simlar problems as follow code:
   <div>
        <asp:TextBox ID="TextBox1" runat="server"></asp:TextBox>
       <asp:TreeView ID="TreeView1" runat="server"
OnTreeNodePopulate="TreeView1_TreeNodePopulate" ExpandDepth="0">
           <Nodes>
               <asp:TreeNode PopulateOnDemand="True"
SelectAction="SelectExpand" Text="Root" Value="c:\project">
               </asp:TreeNode>
           </Nodes>
       </asp:TreeView>
   </div>

c# code behind:
   protected void Page_Load(object sender, EventArgs e)
   {
       //TextBox1.Text = Request.Browser.SupportsCallback.ToString();
       TextBox1.Text = DateTime.Now.ToString();
   }
   protected void TreeView1_TreeNodePopulate(object sender,
TreeNodeEventArgs e)
   {
       TreeNode node = e.Node;
       if (node != null)
       {
           if (node.ChildNodes.Count == 0)
               InitNode(node);
       }

   }
   private void InitNode(TreeNode node)
   {
       string path = node.Value;
       string[] dirs = Directory.GetDirectories(path);
       foreach (string dir in dirs)
       {
           TreeNode child = new TreeNode(Path.GetFileName(dir), dir);
           node.ChildNodes.Add(child);
           child.PopulateOnDemand = true;
           child.SelectAction = TreeNodeSelectAction.SelectExpand;
           //child.Expanded = Directory.GetDirectories(dir).Length == 0 ?
false : true;
       }
   }

I put a textbox to show DateTime.Now in this page, I found textbox change
when I click or expand a tree node. So, that means this page post back to
server. I think I have set every thing I need to set. I still can not see
client side populate.