Please, excuse the inconvenience!
It was an omission on our side, which caused the VSExtensions to not get both the WPF 3.5 and WPF 4.0 latest hotfixes reported as available. Here is how you can get them now:
1) Close all Visual Studio instances
2) Navigate to the %appdata%\Telerik\Updates folder
3) Delete the 01248RadControls_for_WPF_35_2011_1_0502_DEV_hotfix_LIB folder
4) Start Visual Studio and load your project
5) Start the Upgrade Wizard and click the Download button. It should download both the 3.5 and 4.0 files now.
Once again, please, excuse the trouble.
the Telerik team
Register for the Q2 2011 What's New Webinar Week. Mark your calendar for the week starting July 18th and book your seat for a walk through of all the exciting stuff we will ship with the new release!