Sorry to hear you're having trouble with the edit modes! Let's see if we can solve this problem.
By default, when you edit a row with RadGrid using PopUp or Forms (or even UserControl), the edit form should automatically close when you fire the Insert/Update command. For some "proof by example," check out these live demos:
That said, based on the RadGrid configuration you posted, it does not seem to be properly configured for data editing. I suggest you add a GridEditCommandColumn. This column will automatically provide the "Edit" button in the "read mode" and the "Update/Cancel" buttons in the edit mode. An example with this column can be found here:
Additionally, make sure your Page Validation is not causing problems with your data operations. I see that you've got some ASP.NET validation controls in your edit templates. If those do not validate, your grid will appear not to "exit" edit mode when the page is posted.
Give that a try and let me know if it helps.