I'd just like to point out that there is an additional step to making the current version of RadEditor work with a MOSS installation that ONLY has the .NET Framework 3.5 installed. I do not have the AJAX 1.0 extensions installed and never have.
When I deployed RadEditor to a web application, it broke it completely. Apparently, this version (5.1) is still looking to use the System.Web.Extensions DLL contained in the 1.0 version of the AJAX framework. I get an error in the Application log about how the system can't find the DLL file. Sharepoint simply displays "unknown error" when you open that particular web app.
What you have to do is add the following:
| <assemblyIdentity name="System.Web.Extensions" publicKeyToken="31bf3856ad364e35" culture="neutral" />
| <bindingRedirect oldVersion="1.0.61025.0" newVersion="126.96.36.199" />
This is in effect the same trick you're using above, but pointing all apps that look for the old AJAX dll to the one that comes with the .NET framework. That made RadEditor work for us.
University of Virginia