Matt,

When you call the ChildRecords collection of a record, it returns the ExpandableFieldRecordPresenter. It does not have any DataRecords in it. You have to access the ViewableChildRecord collection of the ExpandableFieldRecordPresenter. For example, here is how your code should look like to access the first set of child records of a DataRecord:

HighlightChildren(addedRecord.ChildRecords[0].ViewableChildRecords);

...

private void HighlightChildren(ViewableRecordCollection efrc)

        {....}

Note that you can have more that one ChildRecords.

Here you are:

        private void dgRight_Drop(object sender, DragEventArgs e)
        {
            XamDataGrid dragSource = dgLeft;
            XamDataGrid dragTarget = sender as XamDataGrid;

            //Get Instance of the dragger DataRecordPresenter and DataRecord
            DataRecordPresenter draggedPresenter = e.Data.GetData(typeof(DataRecordPresenter)) as DataRecordPresenter;
            DataRecord draggedRecord = draggedPresenter.Record as DataRecord;


            dragTarget.DataItems.Add(draggedRecord.DataItem);

            MarkAsAdded(draggedRecord);

            sortGrid(dragTarget);
            IsSaved = false;
            btnFormSave.IsEnabled = true;
        }

        private void MarkAsAdded(object p)
        {
            DataRecord addedRecord = (DataRecord)p;

            if (addedRecord.ChildRecords.Count >= 1)
            {
                HighlightChildren(addedRecord.ChildRecords);
            }

            addedRecord.Update();
        }

        private void HighlightChildren(ExpandableFieldRecordCollection efrc)
        {
            foreach (Record r in efrc)
            {
                DataRecord dr = r as DataRecord;
                if (dr != null)
                {
                    dr.Tag = "Bold";
                    DataRowView row = dr.DataItem as DataRowView;
                    if (row != null)
                    {
                        if (row["IsFolder"].ToString() == "True")
                        {
                            dr.Description = "Italic";
                            if (dr.ChildRecords.Count >= 1)
                            {
                                HighlightChildren(dr.ChildRecords);
                            }
                        }
                    }
                }
            }
        }

Thanks,

-Matt.