This thread was escalated to me. I examined the problem, and, since changing the DOCTYPE to avoid rendering in quirksmode is not an option, I suggest you use the following approach:
Add this css somewhere on the page:
border: 1px solid #515151;
The problem ultimately comes from a strange IE bug when the toolbar area element would not have its height properly set if emtpy and without an explicitly set border
So, it is necessary to have a border set - then the height setting will also work.
I hope this helps.
the Telerik team