You are absolutely right that we should have documented the changes in RadWindow in Q2 release better, we're sorry for the caused inconvenience with the upgrade.
We are not planning to re-enable the XAML declaration, the recommended approach is to use RadWindow as a user control as explained here. You can create the user control in Visual Studio with the help of TelerikScenarios, I've attached a short video to demonstrate the approach.
All the best,
the Telerik team
Register for the Q2 2011 What's New Webinar Week. Mark your calendar for the week starting July 18th and book your seat for a walk through of all the exciting stuff we will ship with the new release!