I have a similar issue with the restricted zone when dealing with imbedded tabstrips and MDI in IE7. For example, if I point one of the pages in a tab to a page containing tabs, when moving from one tab to the other in the embedded tabs and back again several times, the restriction zone goes for a walk. Here are the pages for you to reproduce: (nothing in the code behinds)
For the outside tabs:
and for the inside tabs:
To replicate problem, select "Inside Tab 1", then "Inside Tab 2", and then back to "Inside Tab 1" again etc. It becomes very noticable after 5 or 6 times back and forth. No issues with Firefox 3.0.7. I also upgraded to RadControls_for_ASP.NET_AJAX_2009_1_311 (great product, btw!)
Any thoughts, suggestions?