I am not sure what approach you have followed to hide the buttons. When I am trying the following code snippet:
toolWindow1.ToolCaptionButtons = Telerik.WinControls.UI.Docking.ToolStripCaptionButtons.AutoHide;
with the latest version Q2 2012 everything works as expected as you can see in the attached screenshot.
I hope this helps. Let me know if you have additional questions.
the Telerik team