Hi Nikhil Vaghela,
The Telerik.Web.UI.dll that is distributed in our releases has two builds - one for .NET Framework 3.5 and another for .NET Framework 4.0.
I suppose that you have downloaded the Telerik RadControls for ASP.NET AJAX archive file via your account - simply use the dll file build for .NET Framework 3.5 under SharePoint 2010.
Best wishes,
Kalina
the Telerik team
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