There a lots of ways.
One way is that you could handle the drop down lists SelectedIndexChanged event, set the drop down to automatically post back, and then in the event handler create the selected number of text box's in a table and add the table to a place holder.
In the event handler the first thing you will need to do is cast the passed in sender object as a DropDownList in order to get the selected value, which will be an integer indicating the number of text box's to add into the form. From there it's a pretty simple loop that creates one new textbox with each iteration. You could stick each textbox into an html table and add that completed table to a placeholder on the web form.