RadDiagramToolbox introduces a set of shapes that can be dragged to a RadDiagram. Internally, this control is a derivative of RadListView in ListViewType.IconsView which is grouped by shape types.
Since RadDiagramToolbox is a separate control it is available in the toolbox. Here is how to put it in action:
Drag and drop RadDiagramToolbox on the form.
Drag and drop RadDiagram on the form.
Run the application. Now, you are allowed to drag any shape from the RadDiagramToolbox and drop it onto the RadDiagram.