Luckily, there is an easy solution. Put an inline conditional statement in the ItemTemplate, as follows:
<ItemTemplate>
<ul>
<li class="col1"><%# Container.DataItem != null ? DataBinder.Eval(Container.DataItem, "CompanyName") : DataBinder.Eval(Container, "Text") %></li>
<li class="col2"><%# DataBinder.Eval(Container.DataItem, "City") %></li>
<li class="col3"><%# DataBinder.Eval(Container.DataItem, "ContactTitle") %></li>
</ul>
</ItemTemplate>
<Items>
<telerik:RadComboBoxItem Text="Select a country" />
</Items>
http://www.telerik.com/help/aspnet-ajax/combobox-insert-default-item-when-databinding.html