Take a look at the following help article, which explains how to deploy RadControls for ASP.NET AJAX in a MOSS 2007/ WSS 3.0 site - http://www.telerik.com/help/aspnet-ajax/moss-deploying-radcontrols.html
The error you see is because you have not copied the Telerik.Web.UI assembly to the web server's GAC.
All the best,
the Telerik team
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