Yes, you can dynamically create TreeViewItems programmatically. Here is a list of links to the help documentation that contains code examples and tutorials to get you started.
While you are in the documentation, look over to the left column and scroll down. Notice the expanded RadTreeView node, you will find other documentation that will be extremely helpful in there.
Ok, so then what you want to do is add a new item to the collection the RadTreeView is bound to. The RadTreeView will detect the change in the collection and then display the new item. Also, you are probably using hierarchical data, you'll want to make sure you add the folder at the proper level.
For instance, here's an example of adding an item to an observable collection. This isn't a RadControls question but a Silverlight one.
This link will bring you to the documentation on the Add method for the ObservableCollection class
This link will bring you to an example of someone who added a new item to a collection.