After reading this, I thought maybe it may be some sort of setting that I have in IE7.
I changed my settings to the default settings and went to http://demos.telerik.com/ASPNET/Prometheus/ComboBox/Examples/Default/DefaultCS.aspx
At the bottom of the browser window, the browser was stuck on '9 items loading' for a long, long time.
In Firefox it works great. In IE it does not.
So I went to manage add-ons on IE to see what was up. When I disabled all the add-ons, you're right, the combo box shows up immediately.
But, when I enabled this:
Norton Confidential from Symantec Corporation, Browser Helper Object, File: coIEPlg.dll
the combox had the delay. Every machine at my work has Norton installed on it.
Hopefully this will help people in the future, or maybe even you guys in seeing what the problem may be with that .dll add-on and the combo box.