The label format expressions do work, however, make sure you are using the latest version of RadChart as it is the only one supporting them. Check this example
for more info. The currency sign is dependent on the CultureInfo.CurrentCulture
I'm guessing it needs to be en-GB for you to be getting the pound sign. Since silverlight runtime is executing in the browser currency will be different for different clients depending on their regional settings. You may of course override the culture setting inside your silverlight application.
The comma separation is by the thousands by default for the currency formatting. Check these links for more info on .NET format strings:
the Telerik team