RadTreeView supports client-side load on demand - you can populate child nodes on demand without postback to the server. The mechanism is quite straight-forward - simply load the root nodes in the initial page request, making sure you set the ExpandMode property to ExpandMode.ServerSideCallBack, e.g.

...
RadTreeNode rootNode = new RadTreeNode();
rootNode.ID = SomeUniqueID;
rootNode.Text = "Root Node 1";
rootNode.ExpandMode = ExpandMode.ServerSideCallBack;
...

"ServerSideCallBack" makes sure that the appropriate NodeExpand event handler is fired server-side without postback (using async remote callbacks). In the NodeExpand event handler, you can check the EventArguments and get the node clicked, e.g.

..
private void RadTree1_NodeExpand(object o, Telerik.WebControls.RadTreeNodeEventArgs e)
{
string nodeID = e.NodeClicked.ID;
string nodeText = e.NodeClicked.Text;
string nodeValue= e.NodeClicked.Value
...
}
..

Please, make sure you access only the ID, Text and Value properties of the node. Since the event is client-side async call, all other properties of the node, including ParentNode and Treeview are not set (and you can not use FullPath, Next, Prev or other RadTreeNode methods).

After you get the ID of the node clicked, you can perform the respective action - query database for the child nodes of the node with the respective ID, check sub-folders, etc (per your requirement), you can set all node properties as you wish, and add them to the Nodes collection of the clicked node, making sure you set the ExpandMode to ServerSideCallBack, e.g.

...
foreach (RadTreeNode node in GetChildNodes(e.NodeClicked))
{
node.ExpandMode = ExpandMode.ServerSideCallBack;
e.NodeClicked.Nodes.Add(node);
}
...

And that's it - RadTreeView takes care of the rest automatically. Please, take into account that nodes loaded this way cannot take part in server events since the server is not aware of their existence. You can still use Href navigation, Targets and all client-side events without any problems, though.