I think a better way is to insert the blank item first, then bind the data just as you have been doing. However you need to set the AppendDataBoundItems
property of the list control.
We use the following method to bind any data source to any list control...
public static void BindList(ListControl list, IEnumerable datasource, string valueName, string textName)
{
list.Items.Clear();
list.Items.Add("", "");
list.AppendDataBoundItems = true;
list.DataValueField = valueName;
list.DataTextField = textName;
list.DataSource = datasource;
list.DataBind();
}