My regional settings in Windows show that date should be formatted as follows:
yyyy-MM-dd
'den 'd MMMM yyyy

Now, when I show a DateTime in you RadPropertyGrid, I get this weird format:
item.Value == "2013-02-12 14:46:39"
item.FormattedValue == "2-12-2013 2:46 "

FormattedValue is shown in the UI (I haven't set the CultureInfo in my app, and all my resources are marked as Neutral). To me, this looks like some non-standard format string.
1) It doesn't use my system's locale.
2) The time has no "PM" suffix.
3) The string has a trailing space.

What's going on? Why doesn't the formatter respect my settings?

Hello Kristoffer,

Thank you for writing.

RadPropertyGrid uses the CurrentUICulture to convert different data types to a string representation. This though is not the correct way for the job. It should use CurrentCulture. I have logged this issue in our Public Issue Tracking System - PITS. You can track its progress, subscribe for status changes and add your vote/comment on the following link - PITS Issue. Until the issue is resolved you can workaround it by setting the CurrentUICulture of your application explicitly.

I have also updated your Telerik points for bringing this issue to our attention.

I hope this will be useful. Should you have further questions, I would be glad to help.

All the best,
Ivan Petrov
the Telerik team