RadGrid is not fully compatible with the RadXmlHttpPanel, because some of its functionality relies heavily on ViewState, and the XmlHttpPanel does not load and save the ViewState of its child controls. More precisely the problem is caused by the Paging mode of the RadGrid. Please set it to NumericPages (
<PagerStyle Mode="NumericPages" />)
and the problem should disappear.
All the best,
the Telerik team
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