When initializing a WINDOW component, you should be able to specify where the window should be rendered. Currently all windows are treated as modals and placed before closing the BODY tag. This feature is vital and also will help developers in creating dashboards and custom tiles views.
The appendTo works fine for adding the window element to a specific container but doing so doesn't actually restrict the movement of the window to that container - unless I'm missing another option somewhere. Handling the drag events and restricting it yourself will do the job but logically I'd expect the window to always be contained to the bounds of its parent if one is specified. If I want it to have free reign over the whole page then I let it do the default and append to the body.
In case you are want to restrict the window to a specific area or parent, refer to this item: http://feedback.kendoui.com/forums/127393-kendo-ui-feedback/suggestions/2925442-kendo-window-restriction-to-specified-area-or-pare