After trying it out myself, there are a few things. You only need to call ActivateNext since there is a ActivateNextNoSelect option. Also, since this is driven by another control, the focus will shift. There is a ultralistview.ItemSettings.HideSelection property which must be set to false so that you can see selection when the control does not have focus.
Did you call the SelectItem perform action afterwards?
Try calling the PerformAction method with the correct paramter.
List of enums:
http://help.infragistics.com/Help/NetAdvantage/NET/2008.3/CLR2.0/html/Infragistics2.Win.UltraWinListView.v8.3~Infragistics.Win.UltraWinListView.UltraListViewAction.html