The PersistenceFramework works only with FrameworkElements and their properties. As you have bound the treeview control, its Items collection holds your business objects rather than the treeviewitem containers. That is why, the settings of the items is not persisted.
You could implement an ICustomPropertyProvider and save the state of the business objects - for example the IsSelected, IsChecked (CheckState), IsExpanded properties, etc., that you have bound with ContainerBinding. When loading, you would have to match the saved objects with the ones in the ItemsSource, so I would recommend using an identifier (much like the GridView persisting demo and the GridViewColumns).
Please let me know if you have questions on this or if you need further assistance.
the Telerik team
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