The provided path must point to a concrete file that is present in the currently shown file list (i.e., in the current folder). If you point the control to a folder that is not yet opened, it cannot navigate to the desired file, because the file list is obtained via a separate request only after the folder is shown to the client, so the control does not know whether the desired file exists yet.
If those conditions are met, setting the InitialPath will work in postback events like Button.Click as well. I will include this information in our documentation and I am also attaching here a short video that shows the expected behavior as a reference.
As for client-side methods—the control offers rich API: http://docs.telerik.com/devtools/aspnet-ajax/controls/fileexplorer/client-side-programming/overview. I believe you will find useful the refresh and set_currentDirectory methods interesting.
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and share your thoughts.