We need have 2 projects in the solution - one is a SilverlightProject, the second is a WebApplication. We need the WebApplication project in order to run the examples with the web server. Running the examples on the server is required for the RadUpload and also give you the ability to check-out the C# and XAML code of the examples while browsing them. I hope this makes sense now.
About the error in Blend - I was able to reproduce it. The problem is that the viewsource.aspx is run by the Blend as a startup page. We will fix this for the release next week. For the moment you can workaround this by setting the index.html as a startup page.
When the project is run in browser and the url is something like :
just change it to
and everything should be ok.
Thanks for pointing ths out!
the Telerik team