If you are trying to develop a Windows Phone 8 application, it would not be created using Telerik's ASP.NET Ajax controls. You would need to install the Windows Phone 8 sdk, then install the Telerik WindowsPhone RadControls. There are several pre-defined templates provided by Telerik once it is installed.
I am not trying to create a phone application - I am trying to create an ASP.NET application using ajax. Please reread my original post (I think you read Windows 8.1 RTM and confused that with Windows Phone).