A little update: I found our RadControls download, and installed that. The name of the download is: RadControls for ASPNET AJAX Q1 2008. As mentioned, I'm using Telerik reports, version Q1 2008. When I drop and drag my RadGrid onto my aspx page, it automatically drops the:
@ Register Assembly="Telerik.Web.UI" Namespace="Telerik.Web.UI" TagPrefix="telerik" %> into my page as expected. I immediately get a warning though in my Error List stating: "Unrecognized tag prefix or device filter 'telerik'." As you can see above... it IS defined! What could I possibly be doing wrong. I'm running out of time fast.