Sorry about that!
There is a rare case when some files remains from the previous installation and thus breaking the VSExtensions. I guess you might have experienced that exact problem. Could you please try the following steps in order to re install the Extensions?
1. Close all Visual Studio instances
2. Use Windows Explorer to check the following two folders for "Telerik WebUI VSExtension" subfolders and delete them: %localappdata%\Microsoft\VisualStudio\10.0\Extensions\Telerik
3. Open VS2010 and go to Tools -> Extension Manager. Go to the Online Gallery and in the Search field in the top right corner type Telerik.
4. Download and install Telerik WebUI VSExtension. Restart the studio if it prompts to.
5. Try again to create new Telerik Project.
Let me know if that helps.
the Telerik team
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