You could set the WebDialog z-index after it is being shown. You will need to retrieve the WebDialogBox Window Element and set the z-index of the element manually. Here is the snippet:

[DialogBoxObject].Window.GetWindowDivElement().style.zIndex = 10000;

Thanks for the reply.

Do you know the Z-INDEX in the previous 2008 R2 where the WebDialog was visible above the WebTreeView/WebCombo control? It should be changed back as the WebDialog should be on top.

I have confirmed that there is some modification done in the z-index for numerous components in 2009 release for compliancy issue with XHTML. However, our developer will need further investigation to determine if it is the cause of this issue. We will inform you if there is any update regarding this issue.  

I have just been updated regarding this issue from the developer. Here is a quote from the developer regarding this issue:

After investigating, it appears this changes is by design. Popup should appear on the top of anything else, so users can select something from it easily. Eg, color picker, font list, etc. So the changes for popup zindex is as expected.

The changes is by design and not a bug.

I have just been updated regarding this issue from the developer. Here is a quote from the developer regarding this issue:

After investigating, it appears this changes is by design. Popup should appear on the top of anything else, so users can select something from it easily. Eg, color picker, font list, etc. So the changes for popup zindex is as expected.

The changes is by design and not a bug.

It must be a bug because before the release it appeared above the WebTreeView/WebCombo control and now it is behind it. Please refer to the inital post in this thread for details.

This currently is not an issue because I was able to change the Z-INDEX of the WINDOW.