This is in fact the expected behavior. OpenAccess requires that the persistent classes are part of a project which can be compiled to an assembly. This is because certain code enhancements have to be made to this assembly as a post-build step. The issue with the web site is that it is actually compiled dynamically by the web server, therefore the required code modifications cannot be made.
You have two options :
1. Create your web site but add the domain model to another project of type Class Library and reference this project from the web site.
2. Use a Web Application project instead of a Web Site. Web Applications are compiled as regular Visual Studio projects and OpenAccess has no problems working with them.
Also note that in general it is a good practice to separate the data model from your UI project, even when using a web application. I hope that helps.
the Telerik team
Q1’11 SP1 of Telerik OpenAccess is available for download
; also available is the Q2'11 Roadmap
for Telerik OpenAccess ORM.