Hi Kabs Hussain,
If you are not using virtualization, you can try deselecting the containers of the SelectedItems:
var container = RadTree.ContainerFromItemRecursive(item);
container.CheckState == System.Windows.Automation.ToggleState.Off;
If the you are using virtualization I can suggest binding the CheckState property of the TreeViewItem to one of the properties of your ViewModel by using ContainerBindings. This will be easier than making sure containers exist in order to uncheck them.
Currently modifying the CheckedItems collection does not change the CheckedState of the items, i.e. it can only be used to enumerate the checked items. We are planning to improve this, but unfortunately I am not sure if we will manage to include it in SP1.
the Telerik team