That would be the easier approach.
As you know, the .xap file contains the assembly of your Silverlight project. That assembly has an Application class (usually class App) which sets its RootVisual element to the one of the user controls in the project:
the MainPage is the control that hosts your RadGauge for example.
sender, StartupEventArgs e)
So, as you suggested, you need to create another SL project and use the other controls in it. Then copy the generated xap to a folder that will be used by the other asp.net page.
Hope this helps.
All the best,
the Telerik team
Let us know about your Windows Phone 7 application built with RadControls and we will help you promote it. Learn more>>