RadComboBoxItem does not have a Selected state, unlike the standard ComboBoxItem in Silverlight. When the drop-down is opened, the selected item is highlighted, but when the mouse moves over the other items, the highlight moves, thus making the selected item indistinguishable.
I guess that it is a good idea to add Selected state to RadComboBox item and I will add this feature to the product backlog and we will implement it in the near future, most probably for Q3 2009 SP1 which will be released in a month or so.
If you just want to change the highlight colors, I suggest editing the Highlighted state. The SelectionBoxItemTemplate is the template, that is applied on the selected item, when it is displayed in the RadComboBox itself (not in the dropdown), when IsEditable=false.
the Telerik team