The manually set height of RadWindow is not persisted after PostBack if the control's ShowContentDuringLoad property is set to False. The issue is reproducible in IE9.

Video: http://screencast.com/t/ChvvBVzst

Workaround: Set ShowContentDuringLoad="true" when the current browser is IE:
    <button onclick="OpenRadWindow();return false;" class="Button" style="width: 190px"> Show popup window</button>
    <script type="text/javascript">
        function OpenRadWindow() {
            var oManager = GetRadWindowManager();
            oWind = oManager.getWindowByName("RadWindow1");
            //workaround
            if ($telerik.isIE)
                oWind.add_pageLoad(pageLoaded);
            oWind.show();
        }

        function pageLoaded(oWind) {
            oWind.set_showContentDuringLoad(true);
        }
    </script>