I think the reason your rowTemplate doesn't work when you use detailTemplate is because it should have tr and first td defined as a hierarchy grid. ( http://jsfiddle.net/yzKqV/3/ )
<script id="rowTemplate" type="text/x-kendo-tmpl"> <tr class="k-master-row"> <td class="k-hierarchy-cell"><a href="\#" class="k-icon k-plus"></a></td> <td> #= FirstName # </td> <td> #= LastName # </td> </tr> </script>
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