In order to display local icons on the map, you can use the following code snippet: 

OpenStreetMapProvider osmProvider = new OpenStreetMapProvider();
this.radMap1.MapElement.Providers.Add(osmProvider);
this.radMap1.Layers.Clear();
this.radMap1.Layers.Add(new MapLayer("Capitals"));

using (FileStream kmlStream = new FileStream(@"..\..\Kmls\kmlImagesLocalSource.kml", FileMode.Open))
{
    KmlReader.UseLocalImages = true;
    KmlReader.LocalImagesFolder = @"D:\Kmls\images\";
    
    List<MapVisualElement> elements = KmlReader.Read(kmlStream);
    foreach (MapVisualElement item in elements)
    {
        item.BorderWidth = 1;
        item.BorderColor = Color.Red;
    }
    this.radMap1.Layers["Capitals"].AddRange(elements);
}

this.radMap1.BringIntoView(pointLisboa, 14);