Thank you for the report. Indeed we have such design time problems with VS 2008 and our Telerik.Web.UI.dll build against .net 3.5 framework. You may find helpful the following discussion:
Our developers managed to fix part of the problem - design time under VS 2008, used on Windows XP machine. Unfortunately, the problem with Windows Vista and VS 2008 still remains.
If you are using Windows XP and want to receive a hotfix which addresses the problem, please open a support ticket.
We hope that the design time problem with Windows Vista and VS 2008 will be solved in the next service pack of the "Prometeus" controls.
the Telerik team