** This issue is addressed in ArcGIS 9.0 Service Pack 2 (SP2) **
Web Controls are not working in the State Server environment. Developer are prohibited from using separate state servers.
When a remote State Server is used with the templates:
No images shows up at runtime for MapViewer application - all links are broken.
runtime - MapViewer application images shows up fine, but when you try to do Map navigation it throws application error - session has timed out.