I have webcombo defined on page in a div holder that is used for displaying jquery dialog.

Markup looks like this:

<div class="careerOutlooksHolder">
 <table>
 <tr>
 <td><textarea class="txtCareerOutlook" id="txtCO1" runat="server"></textarea></td>
 <td>
 <iswebcombo:WebCombo ID="cmbRL1" runat="server" AllowWildCardSearch="false" Width="100" 
 Height="20" DataValueField="IdReda" DropDownRows="20" AllowAutoDataCaching="true"
 ViewStateStorage="PageCache" EnableWebResources="Auto" DataTextField="Naziv" ClientIDMode="Static">
 <LayoutSettings ComboMode="MultipleColumns" EnableAnimation="False" AlwaysShowAllRowsOnDropdown="true" 
 EntryMode="AutoComplete" StatusBoxPosition="Top" StatusBoxVisible="true" >
 <ClientSideEvents OnAfterItemSelected="cmbRL_OnAfterItemSelected" />
 </LayoutSettings>
 <Columns>
 <iswebcombo:WebComboColumn Name="Naziv" HeaderText="<%$GetString:{%00_pub_Name%}%>" BaseFieldName="Naziv" />
 </Columns>
 </iswebcombo:WebCombo>
 </td>
 </tr>
.....

 careerOutlooksHolder div is turned into jQuery dialog on client-side pageLoad.

When dialog is opened, webcombo crashes on it's drop-down displayed. However if I use the same combo outside of the dialog, it works just fine.

error is as follows: 

Type : System.Xml.XmlException, System.Xml, Version=4.0.0.0, Culture=neutral, PublicKeyToken=b77a5c561934e089
Message : Data at the root level is invalid. Line 1, position 719.
Source : System.Xml
Help link : 
LineNumber : 1
LinePosition : 719
SourceUri : 
Data : System.Collections.ListDictionaryInternal
TargetSite : Void Throw(System.Exception)
HResult : -2146232000
Stack Trace : at System.Xml.XmlTextReaderImpl.Throw(Exception e)
 at System.Xml.XmlTextReaderImpl.Throw(String res, String arg)
 at System.Xml.XmlTextReaderImpl.ParseRootLevelWhitespace()
 at System.Xml.XmlTextReaderImpl.ParseDocumentContent()
 at System.Xml.XmlTextReaderImpl.Read()
 at System.Xml.XmlLoader.LoadDocSequence(XmlDocument parentDoc)
 at System.Xml.XmlLoader.Load(XmlDocument doc, XmlReader reader, Boolean preserveWhitespace)
 at System.Xml.XmlDocument.Load(XmlReader reader)
 at System.Xml.XmlDocument.LoadXml(String xml)
 at ISNet.WebUI.ISNetControl.LoadPostData(String postDataKey, NameValueCollection postCollection)
 at ISNet.WebUI.WebCombo.WebCombo.LoadPostData(String postDataKey, NameValueCollection values)
 at System.Web.UI.Page.ProcessPostData(NameValueCollection postData, Boolean fBeforeLoad)
 at System.Web.UI.Page.ProcessRequestMain(Boolean includeStagesBeforeAsyncPoint, Boolean includeStagesAfterAsyncPoint)

 As I said, it works just fine when it's not in dialog control.