The cell highlighting doesn't work if the ItemsSourceProvider.ItemsSource is set at runtime, while the drop down is open. The filtering of the items works, but the cell content is not colored.

To work this around, make sure to set the ItemsSource before the drop down gets opened.

The filter is not updated when the DeferTextChange property is set to True.  The properties set to the control:

<telerik:RadMultiColumnComboBox x:Name="OptionsComboBox"
                                DisplayMemberPath="Name"
                                NullText="Select an option..."
                                CloseDropDownAfterSelectionInput="True"
                                DropDownWidth="440" DropDownHeight="220"
                                Height="32"
                                SelectionBoxesVisibility="Collapsed"
                                AutoCompleteMode="SuggestAppend"
                                ClearSelectionOnDeleteOrBackKey="True"
                                DeferTextChange="True">
. . . . . 

1. Select Banana from the dropdown. It should appear as editable text without the little × button.
2. Reopen the dropdown, so we can se it
3. Click in the middle of banana in the textbox(not the dropdown), then Ctrl+A and type zz.
4. Wait a second, then Ctrl+A, Backspace.