I tried binding a RadBinaryImage in a bound control to a null value and it worked correctly - did not show anything and did not throw and exception. So, please confirm that your conversion works correctly and that there are no mistakes in the syntax.
Also, confirm that when you comment out the RadBinaryImage from the RadListView the error goes away, as the wrong string format exception does not sound related to the DbNull value of the binary image's source.
All the best,
the Telerik team
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