I would like to clarify that your observations are absolutely correct and the RadAutoComplteBox automatically selects the first item in the list. This is built-in functionality and the only workaround in to avoid this behavior is to deselect the item before you press tab or click into a different area on the screen. You can do that by simply pressing the upper arrow on your keyboard. Once the item is deselected it will not select the first item when the RadAutoCompleteBox lost the focus.
I would like to apologize for any inconveniences caused.
If you want to get updates on new releases, tips and tricks and sneak peeks at our product labs directly from the developers working on the UI for ASP.NET AJAX, subscribe to the blog feed