I've noticed a problem that the editor is now stripping off any background-image style from any tag. The problem seems to be that it is converting single quotes (') to double quotes (") which then close the opening quote for the style property, therefore making the HTML invalid.
Here's how it can be reproduced:
In the rad editor go the HTML tab.
Add the following code:
<div style="background-image: url('something.jpg');">This is a test</div>
Click the Design tab, then back to the HTML tab.
Notice that the attribute has been changed so that it now reads:
<div style="background-image: url("something.jpg");">This is a test</div>
This is obviously invalid HTML. Click on the Design tab then back to the HTML tab. The style has now been removed completely.
This can be reproduced in the current Telerik demo site.