Currently I am not familiar with any problems related to RadControls in an ASP.NET MVC application hosted using Rackspace cloud.
Nevertheless I will suggest you verify that they really can support ASP.NET MVC and all .NET 3.5 features. You can also review our new components
build especially to work in ASP.NET MVC environment.
You can also review this blog post
which explains how to use RadControls in ASP.NET MVC.
All the best,
the Telerik team