I'm sorry to hear about your problem. Unfortunately we are unable to reproduce this behavior locally - annotate execution works fine in Quick Execute with similar to your test provided.
As you didn't experience it before with the official release, what I would suggest is the following: we are going to release a new official release in the next few weeks, I'll let you know when it is out, so you can take it and hopefully the problem will be fixed in your setup also then.
Tell me if this works for you.
All the best,
the Telerik team
for a live 'What's New in Test Studio R1 2011 SP2' event on Tuesday, July 19 at 2pm EST!
Have you looked at the new Online User Guide
for Telerik Test Studio?