If you are using the Lite version of RadEditor for MOSS, there is no need for you to extend your MOSS site with ASP.NET AJAX and there is no need of script manager on the page. This control is based on the classic RadEdtitor for ASP.NET AJAX.
Regarding the problem
The first time you activate a RadEditor feature, you must be logged as an Administrator user. This is required, because the editor needs to update the default list editing template by copying a file - from \TEMPLATE\FEATURES\RadEditorFeature\RadEditorList.ascx to \TEMPLATE\CONTROLTEMPLATES\RadEditorList.ascx.
The file is copied by the IIS worker process, which in turn is impersonating the currently logged in user. That is why you need to be logged in as an Administrator to be able to copy the file. Once the file is copied, any user can activate/deactivate the RadEditor features. The RadEditorList.ascx file will stay until you uninstall the RadEditor for MOSS product.
the Telerik team