I am setting the property EmptyMessage at design time:
<telerik:RadTextBox ID="txtSearch" Runat="server" MaxLength="50" Width="100%" EmptyMessage="Enter search criteria here" CssClass="searchTextBox" />
The text "Enter search criteria here" is displayed when the textbox does not have focus and gets hidden when getting focus. So far behaving as expected. Now, if I press ESC twice while the textbox has focus, the text is displayed and becomes editable. Also, if there is text, pressing ESC once deletes the entered text.