In order to get the paging to work correctly I believe you should return IQueryable from your data service operations. Actually I was able to get it working correctly using Brad Abrams example for nHibernate
and WCF RIA Services. I have updated the example to use RadGridView instead of DataGrid. You can find the sample attached to this forum thread.
P.S.: If you want the built-in RadGridView filtering to filter on the server check out this online example
which illustrate how to achieve this.
Hope this helps,
the Telerik team