In Silverlight 3 there is no built in support for right click. We added such support, but it requires the application to be in windowless mode. I guess this is the problem. Other option would be to use EventName and ModifierKey properties on RadContextMenu to change the default event (right click) which opens the menu - for example EventName="MouseLeftButtonUp" and ModifierKey="Control" would make the context menu to open on Ctrl + MouseClick.
the Telerik team