This sounds so strange and I'm sorry you ran into this problem. Let me try to reproduce it on an XP with Visual Studio 2008 SP as you clarified.
In the meantime can you please check if any exception is logged locally? In the product installation folder please check whether the Logs directory is still empty or a text file is created. If a file exists please post the content here, thank you!
the Telerik team
Do you want to have your say when we set our development plans?
Do you want to know when a feature you care about is added or when a bug fixed?
Telerik Public Issue Tracking
system and vote to affect the priority of the items