Thank you for the question.
Generally, you should add our assemblies to the output folder of the project. For more information, please read this walkthrough. However, according to our license agreement, you are not allowed to distribute our assemblies in a way that will others to reuse these assemblies without the necessary license. Therefore, you can use the ILMerge approach to distribute our dlls.
I hope this helps.
the Telerik team
Q1’11 SP1 of RadControls for WinForms is available for download
; also available is the Q2'11 Roadmap
for Telerik Windows Forms controls.