Unfortunately, this feature is still not implemented in RadListBox. However I have prepared a very simple project for you which demonstrates how to achieve the desired behavior with a few lines of code, as the TextWrap feature is built in the TextPrimitive element which we use to render the text in our controls.
I have used the latest version of RadControls for WinForms to prepare the project.
Do not hesitate to write me back if you need more information.
the Telerik team