We are not aware of such a problem and we have not been contacted with such a report so far. That is why I am not sure about the exact setup which reproduces it. I prepared a sample demo, based on your explanations and test it with RadControls v. 2009.1 402 as you noted and also with the latest release - v. 2009.2 616. I ran the page under IE7 and IE8 but under both browsers there was no error - please see the attached demo for your reference. In case you do not reproduce the error in my demo as well, please tell me how to modify it in order to observe the problem and I will od my best to help.
the Telerik team