Indeed, you are correct that when using a RadToolTipManager which loads the content through AJAX, you actually get an update panel and when you ajaxify with the RadAjaxManager you wrap the updated content with another update panel - as a result you get nested update panels and thus, tje outermost update panel should have UpdateMode="Conditional". However, you say that "the updatepanel wrapping the UserControl is in 'Conditional' updatemode"
and at the same time you are using RadAjaxManager. This makes me think that you have captured the OnAjaxSettingCreating
event of the RadAjaxManager and you have set UpdateMode="Conditional" for its update panel there. If so, please note that in some cases this property of the manager does not work as you expect and I assume that this is your case.
This being said, I recommend to remove the setting from the RadAjaxManager and to use a standard update panel with UpdateMode="Conditional" for ajaxifing your user control instead of ajax manager - this should fix the problem.
the Telerik team