Hello Kenneth,
The k-sprite class doesn't have the k-icon background-image set, thus nothing is rendered (k-sprite is meant to be used with custom images). However, if you add the k-icon class, the element will get removed by the arrow init (which uses k-icon to find the arrow). I'll change this for the next release, but meanwhile you can use k-tool-icon instead, like this:
<li><span class="k-sprite k-tool-icon k-i-refresh"></span>Refresh</li>
Greetings,
Kamen Bundev
the Telerik team
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