>> First of all, you will see that the password box appears to have a value, although clicking on the button will show that it doesn't.
The "value" that you are seeing is actually the EmptyMessage. Since it is not a real value, it is not returned as such on the server. I am afraid we don't support EmptyMessage with password RadTextBoxes.
>> What I actually get is "Drag text on to me....................".
Indeed, it is not expected for the empty message to be preserved and transformed into a part of the textbox value when you drag text into the textbox. We will fix this. Thank you for the report.
the Telerik team