You will be able to change the font size as you attempt to do with the source above with the official release of RadControls for Sliverlight we are publishing next week. I've just tried that with the latest source and I'm able to change the font size of all the tree nodes.
Feel free to download the bits as soon as we announce the major Q3 2008 release and get back to us should you need our assistance. Please excuse us for the temporary inconvenience.
the Telerik team
Check out Telerik Trainer
, the state of the art learning tool for Telerik products.