I've just installed Telerik and have reinstalled VS 2008 (latest).
I tried a simple website project and dragged a ScriptManager onto the page and get the error:
Error Rendering Control - RadScriptManager1
An unhandled exception has occurred.
Could not load file or assembly 'Telerik.Web.UI, Version=2009.1.311.35, etc ..system cannot find the file specified.
I have manually browsed to the bin35 folder and added the Telerik DLL from there, still the same error.
Nothing's working with this installation! Theres no contextual Smart Tag available, and VS crashes if you change a property in a control.