Unfortunately, WCF RIA Services do not support real grouping. When you group on the server, it simply sorts the data according to the grouping, but it does not perform real grouping, i.e. it does not return groups. Instead it returns sorted Entities.
Unless MS decide to implement grouping -- there is nothing that can be done as far as grouping on the server is concerned.
I hope this helps.
the Telerik team
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