¿Cómo combinar GROUP BY y ROW_NUMBER?

Guau, las otras respuestas parecen complejas, así que espero no haberme perdido algo obvio.

Puedes usar OVER /PARTITION BY contra agregados, y luego agruparán/agregarán sin un GROUP BY cláusula. Así que acabo de modificar su consulta a:

select T2.ID AS T2ID
    ,T2.Name as T2Name
    ,T2.Orders
    ,T1.ID AS T1ID
    ,T1.Name As T1Name
    ,T1Sum.Price
FROM @t2 T2
INNER JOIN (
    SELECT Rel.t2ID
        ,Rel.t1ID
 --       ,MAX(Rel.t1ID)AS t1ID 
-- the MAX returns an arbitrary ID, what i need is: 
      ,ROW_NUMBER()OVER(Partition By Rel.t2ID Order By Price DESC)As PriceList
        ,SUM(Price)OVER(PARTITION BY Rel.t2ID) AS Price
        FROM @t1 T1 
        INNER JOIN @relation Rel ON Rel.t1ID=T1.ID
--        GROUP BY Rel.t2ID
)AS T1Sum ON  T1Sum.t2ID = T2.ID
INNER JOIN @t1 T1 ON T1Sum.t1ID=T1.ID
where t1Sum.PriceList = 1

Lo que da el conjunto de resultados solicitado.