For the time being you can either skip the selects elements from decoration:

ASPX:

        <telerik:RadFormDecorator ID="RadFormDecorator1" runat="server" DecoratedControls="All" ControlsToSkip="Select" />
        <div id="div1">
            <telerik:ReportViewer ID="ReportViewer1" runat="server" Height="492px" Width="927px"></telerik:ReportViewer>
        </div>


Or decorate only particular zone that do not include the ReportViewer:

ASPX:
        <telerik:RadFormDecorator ID="RadFormDecorator1" runat="server" DecoratedControls="All" DecorationZoneID="div2" />
        <div id="div1">
            <telerik:ReportViewer ID="ReportViewer1" runat="server" Height="492px" Width="927px"></telerik:ReportViewer>
        </div>
        <div id="div2">
            <input type="text" name="name" value=" " />
            <select>
                <option>option1</option>
                <option>option2</option>
                <option>option3</option>
            </select>
        </div>

Typing a letter key must move the focus to the next instance of a visible node whose title begins with that printable letter.

Tabbing to decorated select element by RadFormDecorator, focuses the original select element. For the time being the following workaround can be used:

JavaScript:

        <script>
            function pageLoad() {
                $ = $telerik.$;
                $.each($(".rfdRealInput"), function (index, value) { value.setAttribute("tabindex", "-1") });
            }
        </script>

ASPX:
        <telerik:RadFormDecorator ID="RadFormDecorator1" runat="server" DecoratedControls="All" RenderMode="Lightweight" />
        <asp:TextBox ID="Textbox1" runat="server" />
        <asp:DropDownList ID="Dropdownlist1" runat="server">
            <asp:ListItem Text="text1" />
            <asp:ListItem Text="text2" />
        </asp:DropDownList>
        <asp:TextBox ID="Textbox2" runat="server" />
        <telerik:RadButton ID="RadButton1" runat="server" />

In Q3 2013 Firefox and Chrome freeze when a container with a select element is made visible with JavaScript and RadFormDecorator is present on the page.

The issue will be fixed for the upcoming Q3 2013 SP1. For the time being possible workarounds are:

    - Setting the ControlsToSkip property of the RadFormDecorator to "Select".
    - OR placing the provided JavaScript code from the attached archive below the declaration of the RadFormDecorator.

Sample scenarios that reproduce the issue are:

    - Expanding an inner item from a RadPanelBar. The RadPanelBar has multiple Items that contain select elements and a RadFormDecorator is present on the page.
    - JavaScript is used to set the display property of a container with a select element to "block" for example, multiple containers with select elements are present on the page and RadFormDecorator is used. For example:
JavaScript:

<script type="text/javascript">
    function pageLoad() {
        $get("div1").style.display = "block";
    }
</script>

ASPX:

<telerik:RadFormDecorator ID="RadFormDecorator1" runat="server" DecoratedControls="All" />
<div id="div1" style="display: none;">
    <select>
        <option>text1</option>
        <option>text2</option>
        <option>text3</option>
    </select>
</div>
<div id="div2" style="display: none;">
    <select>
        <option>text1</option>
        <option>text2</option>
        <option>text3</option>
    </select>
</div>

Improve the appearance of decorated Select and ASP DropDownList by RadFormDecorator in RenderMode="Classic", so that their look resembles RadDropDownList.

For the time being RenderMode="Lightweight" can be used.

Rejected with comment:
Future appearance improvements for RadFormDecorator in Classic mode will not be availalble anymore. The expection will be issues related to functionality or critical appearance issues.

Currently decorated inputs by RadFormDecorator are set with TabIndex="-1", so that they cannot be focused. Expose an additional property in RadFormDecorator through which the decorated button can be focused.

For the time being the focus() can be set to the parentNode of the button. For example:

document.getElementById('Button1').parentNode.focus();

Rejected with the following comment:

When trying to enable/disable an input element that is decorated with RadFormDecorator, the disabled attribute must be set to the DOM input element and not to the JavaScript input object, in order for the RadFormDecorator to take effect. For example:
ASPX:
<telerik:RadFormDecorator ID="RadFormDecorator1" runat="server" DecoratedControls="All" />
<telerik:RadButton ID="RadButton1" runat="server" AutoPostBack="false" OnClientClicked="disableCheckBox" Text="click" />
<input type="checkbox" id="checkbox" name="name" value="sdf" checked="checked" />
JavaScript:
function disableCheckBox() {
    var checkbox1 = $telerik.$('#checkbox');
    //Either
    //checkbox1.prop('disabled', 'disabled');
    //OR
    checkbox1[0].disabled = true;
}
In IE there is an issue with the disabled property of the DOM elements, when it comes to tracking it. This issue is reproduced only when the element is enabled and should become disabled. The other way around the tracking is working, i.e. if the select is disabled it can be enabled and IE will raise an event about it. This is a browser issue and there is nothing that can be done on our side to work around it.

The disabled inputs should be darker so it is visually clear that you cannot enter text in them. This does not happen with some skins (e.g. Windows7) with the lightweight rendermode.

When decorated button is disabled on the client, its appearance is not changed under IE10. The issue is related only to the visual appearance and not to the functionality of the decorated button.

Update: The issue is not observed in Lightweight render mode
Currently text color is different in RadButton (color: #00156E) and decorated ASP Button (color: black) with RadFormDecorator for Office2007 skin. For the time being a custom CSS can be used either for the RadButton or for the decorated ASP Button:

-Custom Styles for the RadFormDecorator:

    <style type="text/css">
        .RadForm_Office2007.rfdButton a.rfdSkinnedButton,
        .RadForm_Office2007.rfdButton input.rfdDecorated[type="button"],
        .RadForm_Office2007.rfdButton input.rfdDecorated[type="reset"],
        .RadForm_Office2007.rfdButton input.rfdDecorated[type="submit"],
        .RadForm_Office2007.rfdButton .rfdSkinnedButton button, 
        .RadForm_Office2007 a.rfdSkinnedButton,
        .RadForm_Office2007 .rfdSkinnedButton button, 
        .RadForm_Office2007 .rfdSkinnedButton input.rfdDecorated,
        .RadForm_Office2007.rfdButton a.rfdSkinnedButton,
        .RadForm_Office2007.rfdButton a.rfdSkinnedButton *
        {
            color: #00156E !important;
        }
    </style>

-Custom Styles for the RadButton:

    <style type="text/css">
        .RadButton_Office2007.rbSkinnedButton,
        .RadButton_Office2007 .rbDecorated,
        .RadButton_Office2007.rbVerticalButton,
        .RadButton_Office2007.rbVerticalButton .rbDecorated,
        .RadButton_Office2007 .rbSplitRight,
        .RadButton_Office2007 .rbSplitLeft
        {
            color: black !important;
        }
    </style>

A possible workaround is to avoid the decoration of button controls by setting RadFormDecorator's ControlsToSkip property to "Buttons".