I'm also getting an error trying to create a new project using the Telerik Silverlight Template using the new Q3 release (non-trial version). I'm using VS 2008 SP1 on WinXP SP3. See attached jpg for the error, but basically the same as reported earlier.
I resolved my issue by doing the following steps -
- Uninstalled RadControls for Silverlight 2009 Q3
- Uninstalled Silverlight 3 SDK Tools
- Reinstalled Silverlight 3 SDK Tools & verified I could create a standard Silverlight App in VS 2008.
- Reinstalled RadControls for Silverlight 2009 Q3 & verified the templates were working.
It appears somewhere along the line my copy of the Silverlight 3 SDK became corrupted and therefore preventing the template from working properly,