One difference in the behavior of the DomainDataSource is that when the service returns null the Queried event is not fired so you can use this to determine whether you are binding to null or an empty dataset:
sender, DomainDataSourceQueriedEventArgs e)
sender, EventArgs e)
//zero or more records in the dataset
//null - no dataset at all
Hope this helps.
the Telerik team
If you want to get updates on new releases, tips and tricks and sneak peeks at our product labs directly from the developers working on the RadControls for ASP.NET AJAX, subscribe to their blog feed