Am I the first to report a bug?

Well, in VS2005 IDE you select a color property of a custom control, you got a color picker popup like this:

This is a System.Drawing.Color property for Telerik's RAD Chart control.

Just converted the app to VS2008 (but remains targetted at 2.0) and now the popup is this miserable effort:

 Was this intentional? I checked a color property of an ASP:TextBox and it gets a smart new dialog box...

Maybe Telerik has a patch for VS2008.  You may want to post your question here:

http://www.telerik.com/community/forums/allthreads/b312H-m.aspx

It does not seem to be specific to Telerik or the rad chart.

I just did a quick test, by creating a simple ASP server control in VS2008 and adding it to an ASP.NET website.
The standard asp.net ForeColor property gets the new dialog, the custom TestColor property gets the
drab little text list. Must have broken in VS2008 build and got past the testers!

Once MS adds a Visual Studio 2008 release category to the feedback page I'll add it there..

This seems to be specific to Telerik control. Perhaps it does not describe color property exactly the way ASP.NET controls do and VS fails to wire it to the color picker. I tried standard controls and they work OK. I would suggest asking Telerik, perhaps control needs to be updated.

Is there a correct way to put attributes on a property to specify the color picker should be used in the property grid?

Think that this is definitely a bug. The edit control (from doing a bit of searching and using Reflector) is defined on Color class using EditorAttribute - this editor comes from System.Drawing.Design and both System.Drawing and System.Web have not been changed since version 2.0 - I remember Daniel Moth stating clearly that most of the main libraries are untouched for VS2008, it is mainly extensions.

So the fact that the VS2008 IDE is now showing a different colour picker for ASP.NET controls such as UI.WebControls.TextBox must mean they are ignoring the Editor attribute and using a new picker - but that this isn't picking up non-ASP control properties for some reason.

Maybe you can post it on one of the Futures sections.

Perhaps control does not invoke color builder for the property? I.e. VS responds when control designer invokes color builder via http://msdn2.microsoft.com/en-us/library/system.web.ui.design.iwebformsbuilderuiservice.buildcolor.aspx

This cannot be the case. The Drawing.Color and Web.UI.WebControls.TextBox etc cannot have changed as the libraries are still version 2.0, and the BuildColor you refer to only exists in .NET 3.0 - so unless the libraries have been changed then the only conclusion is that VS2008 IDE is remapping the color selector itself.. which begs the question why it isn't working for any Drawing.Color property..