This is expected behavior. As outlined in the HtmlTextBox
help article, we expect valid XHTML, and the "&" character is considered special (markup delimiter), so it needs to be encoded in order to be treated as regular text (the "&" character can be escaped with the "&" entity). It is good idea to do this in your data, as otherwise you would have to parse the data in your code, which is not recommended. Check the XHTML Validation
help article elaborates on how you can handle exceptions caused by invalid XHTML.
the Telerik team
Registration for Q1 2011 What’s New Webinar Week is now open. Mark your calendar for the week starting March 21st and book your seat
for a walk through all the exciting stuff we ship with the new release!