Hi Marin,
I really thank full to you for your reply. it helped me a lot to in my development.I followed your comments and I got result with below code.
User Control 1: (In User Control 1 I am calling User Control 2 which will populate in radtooltip)
<telerik:RadAjaxManagerProxy ID="ramRadAjaxManager" runat="server">
<AjaxSettings>
<telerik:AjaxSetting AjaxControlID="pnlModal">
<UpdatedControls>
<telerik:AjaxUpdatedControl ControlID="rtlunits" LoadingPanelID="ralpRadAjaxLoadingPanel" />
</UpdatedControls>
</telerik:AjaxSetting>
</AjaxSettings>
</telerik:RadAjaxManagerProxy>
<div id="divMain" runat="server" style="height: 30px; display: block; margin: 3px;">
<telerik:RadButton ID="btnShow" runat="server" AutoPostBack="True" ButtonType="StandardButton"
Icon-PrimaryIconUrl="~/Images/Filter_Icon_0.gif" OnClick="btnShow_OnClick">
</telerik:RadButton>
<telerik:RadToolTip runat="server" ID="rttBuDisplay" Width="250px" Modal="true" TargetControlID="btnShow"
ManualClose="true" Title="Another User Control">
<telerik:RadAjaxPanel ID="rapBUDisplay" runat="server">
<AnotherUCDisplay:AnotherUC ID="buDisplay" runat="server" />
</telerik:RadAjaxPanel>
</telerik:RadToolTip>
</div>
<asp:Panel ID="pnlMpMain" runat="server">
<ajaxToolkit:ModalPopupExtender TargetControlID="hnfDummy" ID="mpeUnit"
CancelControlID="imgbtnClose" runat="server" Enabled="True" BackgroundCssClass="modalBackground"
PopupControlID="pnlModal">
</ajaxToolkit:ModalPopupExtender>
<asp:HiddenField ID="hnfDummy" runat="server" />
<asp:Panel ID="pnlModal" runat="server" Style="width: 500px;" CssClass="pop-up">
<div class="pop-up-content" style="padding-bottom: 5px;">
<div class="pop-up-top">
<h1>
Select Bussiness Units:
</h1>
<a href="#">
<asp:ImageButton ID="imgbtnClose" runat="server" Width="7" Height="8" border="0"
ToolTip="Close" AlternateText="Close" ImageAlign="AbsMiddle" ImageUrl="~/Images/close.png" />
</a>
</div>
<fieldset style="margin: 0px 0px 0px 0px">
<telerik:RadTreeList ID="rtlunits" runat="server" DataKeyNames="Unit_ID"
ClientSettings-AllowPostBackOnItemClick="false" OnNeedDataSource="rtlunits_OnNeedDataSource"
ParentDataKeyNames="ParentUID" OnItemCreated="rtlunits_OnItemCreated"
AutoGenerateColumns="false" AllowMultiItemSelection="true">
<Columns>
<telerik:TreeListSelectColumn HeaderStyle-Width="38px" UniqueName="UnitCheckboxes">
</telerik:TreeListSelectColumn>
<telerik:TreeListBoundColumn DataField="Unit_ID" HeaderText="Unit_ID"
Visible="false" UniqueName="Unit_ID" />
<telerik:TreeListBoundColumn DataField="LegalName" HeaderText="Name" UniqueName="LegalName" />
</Columns>
<ClientSettings>
<Selecting UseSelectColumnOnly="true" AllowItemSelection="true" />
<ClientEvents OnItemSelected="OnClientNodeClicked" OnItemDeselected="OnClientNodeClicked" />
<Scrolling AllowScroll="true" UseStaticHeaders="true" SaveScrollPosition="true" ScrollHeight="300" />
</ClientSettings>
</telerik:RadTreeList>
</fieldset>
</div>
</asp:Panel>
</asp:Panel>
Thanks Marin once again,
Kaushal Jani