Yes - this is an issue with the latest release. Thanks for reporing this.
We will update the zip on the download section within a few hours. Until then - just don't add the controls in the toolbox. You can use the controls by directly adding a reference to them. Here are the steps how to do this:
1. Select your application project.
2. Right click on the project and select "Add reference ..."
3. Choose the "Browse" tab
4. Select the location where you downloaded the telerik dll.
5. You are now ready to go.
Sorry for the inconvenience - please let us know if you have any other questions.
I'm attaching a Silverlight project with the added references for your convinience.
the Telerik team
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