Can you confirm how you are binding the treelist? If you are using NeedDataSource, the control would rebind itself implicitly on expand/collapse. Have you confirmed that NeedDataSource does not fire? If so, make sure that you do not have any calls to DataBind() for the treelist in your code.
Also, can you confirm that you are following the guidelines for dynamically creating a RadTreeList control, described here:
the Telerik team
If you want to get updates on new releases, tips and tricks and sneak peeks at our product labs directly from the developers working on the RadControls for ASP.NET AJAX, subscribe to their blog feed