I tried removing the file extension and, as expected, the browser did not know what the file was and therefore what to do with it: http://screencast.com/t/WBwmUo2GadAq
. Once I returned it to .txt the default browser action was triggered (which, on my PC, is opening via Notepad).
What I can suggest at this point is that you replace the RadWindow with a regular iframe, as this is what it is essentially. If you get the same behavior then this means that this is the way your browser works and this is not up to the developer to control but to the browser settings.
Once you get the desired behavior with a simple iframe the same approach should work for the RadWindow as well. In case you get different behavior between a RadWindow and a regular iframe please open a support ticket and send us a runnable sample that shows this difference. You can use my pages as base - what is needed is that it is runnable and that it reliably reproduces the issue at hand.
the Telerik team
If you want to get updates on new releases, tips and tricks and sneak peeks at our product labs directly from the developers working on the RadControls for ASP.NET AJAX, subscribe to their blog feed