There was a problem in the version you use that caused the popup palette of the RadColorPicker to show in the wrong place. Generally, before the RadColorPicker shows its palette, it checks whether the palette can show in the visible viewport of the browser window. In case it cannot, the color picker tries to reposition it according to that viewport. The problem was in the code that repositions the palette in case it will not open in the visible viewport of the browser.
However, we have already fixed that problem and in case you update your version to the latest - 2009.1.527, the palette should show in the correct position.
the Telerik team