I would imagine two possible reasons for such a behavior:
Your page DOCTYPE is not XHTML compliant, but the quirksmode one. Please note that XHTML compliant doctype is the default of VS 2005 and is the one recommended for Web development - even more so when MS AJAX is used. Make sure you are using this (or stricter doctype)
<!DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd">
However, since DNN and MOSS environments for legacy reasons also use quirksmode, more recent versions of Telerik RadControls have been updated to work (e.g. to size and position) correctly in this mode as well. So, part of the problem could be that in addition to using a quirksmode doctype, you are using an old Telerik.Web.UI dll version as well. Please make sure you use the latest available for download - currently Q3 2008 SP1.
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