An example HTTPHandler which will proxy requests to the specified server and allow AJAX development locally.

ProxyHandler.cs

public class ProxyHandler : IHttpHandler
{
    const string SERVER_URL = "http://dev-server";

    #region IHttpHandler Members

    public bool IsReusable
    {
        get { return false; }
    }

    public void ProcessRequest(HttpContext context)
    {
        HttpWebRequest webRequest = (HttpWebRequest)WebRequest.Create(SERVER_URL + context.Request.Url.PathAndQuery);
        webRequest.Method = context.Request.HttpMethod;
        webRequest.Credentials = System.Net.CredentialCache.DefaultNetworkCredentials;
        HttpWebResponse response = (HttpWebResponse)webRequest.GetResponse();
        context.Response.StatusCode = (int)response.StatusCode;
        context.Response.Status = string.Format("{0} {1}", (int)response.StatusCode, response.StatusCode);
        context.Response.ContentType = response.ContentType;
        context.Response.Write(new StreamReader(response.GetResponseStream()).ReadToEnd());
    }

    #endregion
}