The ContentTemplate is designed as a container for server controls, so you would need to declare and use a RadWindow with a ContenTemplate (even blank) for this to work as expected. The ContentTemplate element is not created upon client-side setting at this point, so having a content that is not where it is supposed to be may break the control afterwards (e.g., if autosizing is used).
A workaround is to create a dummy content template that can alleviate most issues:
var wnd = radopen(null, wndName);
//create an imitation of the ContentTemplate
if (!wnd.___customContentElemCreated) {
$telerik.$("iframe", wnd.get_popupElement()).remove();
var cElem = document.createElement("div");
cElem.setAttribute("id", wnd.get_id() + "_C");
cElem.style.display = "";
cElem.style.overflow = "auto";
cElem.style.border = "0px";
wnd.set_contentElement(cElem);
wnd.setWidthDockMode(wnd.get_width());
wnd.setHeightDockMode(wnd.get_height());
wnd.___customContentElemCreated = true;
}
wnd,set_contentElement(theNewElem);