I am sure there is a simple answer.
Right and AboveText work.

Left places the Image above the text.
Below place the Image in the text.

<telerik:RadToolBar ID="CommandRadToolBar" runat="server" AutoPostBack="True" Height="48px" SingleClick="None">
    <Items>
        <telerik:RadToolBarButton Text="Add New" CommandName="InitInsert" ImageUrl="~/Images/Tools16X16.png"   ImagePosition="Left" Width="128" >
        </telerik:RadToolBarButton>
        <telerik:RadToolBarButton Text="Refresh" CommandName="RefreshItems" ImageUrl="~/Images/Refresh16X16.png" ImagePosition="Right" Width="128">
        </telerik:RadToolBarButton>
    </Items>
</telerik:RadToolBar>

The issue turned out to only in the ide, when running everything looks good.