Thank you for the feedback. We are aware of this issue, as it is common for some Telerik Rad Controls. The good news is that this is only a problem for Internet Explorer 6 ( it is fixed for IE 7 and is never met in Mozilla Firefox or other ). The problem comes from the inability of IE 6 to cache images so they are loaded every time when you mouse over. A quick fix for your local machine is to change setting of your Internet Explorer this way:
In IE 6 -> Tools -> Internet Options... -> Temporary Internet Files -> Settings... -> Check for newer versions of stored pages
the "Every visit to the page" option is causing this blinking , so you can change this setting and blinking should disappear.
A more thorough discussion and other solutions, including IIS settings, you can find here: http://www.telerik.com/help/aspnet/menu/menu_ImageFlicker.html
If your problem persists and this solution doesn't help, please contact us for further investigation.
All the best,
the Telerik team