Hello Waleed Seada,
It seems that the first time (when you were not able to see the context in the drop down) the project containing the context has not been built yet.
It does not matter which approach (context or .rlinq file) you will use to create your OpenAccess domain service. The result should be the same in both cases. The difference between the two approaches is in the way OpenAccess meta-data is obtained by the wizard.
The reason for the exception that you mention could be failure to create an instance of the OpenAccess context during build (this is needed for generation of client side code by the RIA build infrastructure).
However we cannot be completely certain what is causing the problem without the full exception.
You must also have in mind that if you are using the latest version of OpenAccess you will get a clearer message when the above problem occurs.
I suggest the following:
1. make sure that you are using the latest version of OpenAccess (with a version number of 2010.3.1125)
2. if the problem persists, please send us the full exception message including the full stack trace
the Telerik team