Hello Albert Shenker,
I suppose the problem is that you can see not only the colors you defined in the color picker palette, but the colors from the Default preset as well. The problem is that you have not set Preset="None":
There was a problem with handling the Preset property when its is not set explicitly in the previous versions of RadColorPicker for ASP.NET AJAX that lead to the result you got. As this problem is fixed in Q3 2009, you have not set Preset=None and the default value of the Preset property is Default, you get more colors than you expect. In order for the color picker to display only the colors you defined, please set Preset=None.
All the best,
the Telerik team