We've changed the grouping behaviour because of our new data engine which is tightly coupled to LINQ.
Currently all groups are collapsed, but you can manually expand them. Just subscribe to the DataLoaded event and in the event handler do the following:
| void RadGridView1_DataLoaded(object sender, System.EventArgs e)
However in our first service pack (scheduled for the end of the month) we will introduce new property called AutoExpandGroups - for controlling grouping behaviuor in order to be able to specify the desired behavior directly in XAML
the Telerik team