I am afraid that we cannot build the control against two different sets of assemblies at the same time. We can only target assemblies which are an official part of the .NET Framework/Silverlight.
System.Data.Services.Client.dll is part of the base framework that ships with .NET 3.5 and upwards. The Microsoft.Data.Services.Client.dll is an updated version of this library which is not yet part of the base .NET installation package and contains any new features since the base release.
I am afraid that we are unable to target assemblies which are not part of the official framework, since they can be updated any single day or night through NuGet. You can imagine what that means for a control vendor which depends on Microsoft assemblies. This article
explains the difference between both sets of assemblies.
Have you tried replacing the System.* references with the Microsoft.* ones in your project. If the public API is the same in the Microsoft.* assemblies, your project should be able to compile against the Microsoft.* assemblies. After all, our source code works with several MS classes such as the DataServiceQuery and DataServiceContext -- if they are the same and in the same namespace in the new assemblies then it should be able to compile. Have you tried this approach?
All the best,
the Telerik team