Hi Paul French,
I understand the result that you wish to achieve. However, for the time being, this is not possible. We have placed on our TODO list the task to improve the edge detection when you are opening the palette of the RadColorPicker - for the time being, the palette takes into account the left, top and right boundaries of the window and repositions itself according to them. What is left to do is implement the bottom edge detection.
I believe this feature would give you the desired result.
the Telerik team