I had the 1.x MS Ajax libraries installed before installing Prometheus. I re-downloaded the VS2008 templates and installed them. My project references the System.Web.Extensions v.1.0.61025.0 version. The controls still don't appear in the toolbox. I tried adding the controls (selecting the Telerik.Web.UI.dll file in the bin folder), but they still didn't appear.
I did some more digging and it seems to be related to the fact that I am still running VS 2008 B2. There are steps in the comment section related to users that can't see Ajax 1.x stuff in the toolbox after adding it (and how to fix it).
I followed the steps, started up VS and in the toolbox did a right-click show all. Then I removed the Prometheus controls tab and exited VS again. I ran the app to register the Prometheus controls in VS again, then started up VS. Now the controls appear.