You are using the QA edition, correct? The QA edition does not have any source code debugging features. You can only do source code debugging within Visual Studio using our Visual Studio plug-in version.
the Telerik team
Do you think you know all the new features coming out in Test Studio R1 2011?
Think again - we have some surprises and will share them with you in the What's New in Test Studio R1 2011 Webinar on May 12th.