After using the update wizard in Visual Studio 2008 SP1 to update to 2009.3.1208.35 when using the property builder any new items are added into the asp code start with UI: and not telerik: see example below: (notice existing items OK but new ones added through the property builder are added as UI:)
<telerik:RadAjaxManagerProxy ID="RadAjaxManagerProxy1" runat="server">
<AjaxSettings>
<telerik:AjaxSetting AjaxControlID="btnLogon">
<updatedcontrols>
<telerik:AjaxUpdatedControl ControlID="lblInvalid" />
<telerik:AjaxUpdatedControl ControlID="lblPasswordEmailed" />
</updatedcontrols>
</telerik:AjaxSetting>
<UI:AjaxSetting AjaxControlID="btnPasswordPrompt">
<updatedcontrols>
<UI:AjaxUpdatedControl ControlID="lblInvalid" />
<UI:AjaxUpdatedControl ControlID="lblPasswordEmailed" />
</updatedcontrols>
</UI:AjaxSetting>
</AjaxSettings>
</telerik:RadAjaxManagerProxy>