I understand that you originally reported two scenarios, one without data binding and one with it. However, the screenshots and log you provided are from the data driven scenario, so that's all I had to go on (see the Iteration drop-down next to the Pass/Fail message above step 1).
You are correct; if the IF condition is not met, it and all its nested steps should be skipped (not failed), and the ELSE and its steps should execute and pass.
I suspect the reason the iteration with the invalid credentials fails on the IF is because of the Verification the IF is based on. If you double click the red and white "X" for that step's failure details, I would guess it failed with the "Unable to locate element
" message. When the logon fails, the element does not exist to verify on the failure page as it does on the successful page (your actual application).
So, you'll need to find a common element that exists on both pages so it can be located and verified on successful and
failed attempts. This might be difficult or not possible, depending on how your application is built.
All the best,
the Telerik team
for a live 'What's New in Test Studio R1 2011 SP2' event on Tuesday, July 19 at 2pm EST!
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for Telerik Test Studio?