Thank you for writing.
I am glad that you have found a solution for your case.
I have tested the described approach, but on my end RadGridView is docked fill. Attached you can find a sample application with this scenario. What I did is to create the user control, add grid in it and set the grid Dock property to Fill. Then I have added the user control to the form and I have set the user control Dock property to Fill. Let me know how this works on your end.
A bit off topic, I would like to kindly ask you to ask the license holder of your company to add you as a licensed developer to his account. This will allow you to download our latest products and to take advantage of uninterrupted support services.
I hope that you find this information helpful. Let me know if you have any additional questions.
All the best,
the Telerik team
Q2’11 SP1 of RadControls for WinForms is available for download (see what's new); also available is the Q3'11 Roadmap for Telerik Windows Forms controls.