Indeed, ItemTemplate cannot be used with a load on demand RadRotator. The ClientTemlpate is used for client-side data binding of the rotator as you already noticed. This functionality is different and its template is not designed to be used with loading items on demand.
I created a feature request item in our feedback portal so that you can track the status of this feature, vote for it and comment it: http://feedback.telerik.com/Project/108/Feedback/Details/150801
. The feature will be considered for implementation if it gains a lot of votes.
As for the difficulties you encountered, you could describe your scenario in detail so that I can suggest an alternative approach if such is possible.
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