First, the solution I recommend: do not load either Combinatorica` or GraphUtilities`, and use the built-in RandomGraph function with the appropriate syntax:
g = RandomGraph[{10, 20}]
NeighborhoodGraph[g, 1]
The reason it doesn't work is because when you load Combinatorica, it creates a new RandomGraph function which is incompatible with the RandomGraph built into versions 8 and 9. The situation of graph-related functions is a bit messy at the moment, and there are three different graph representations that are used. There's the Combinatorica package's own graph representation (since about 1996 if I'm correct), there's the edge-list representation used by the GraphPlot and related functions (since around v5) and there's the new, extended graph functionality introduced in version 8 which uses atomic Graph[...] objects. Many of the new v8 graph functions conflict with Combinatorica in the sense that they will be shadowed by Combinatorica functions. Because of this it's better load load Combinatorica like this and refer to Combinatorica functions with their full names: RandomGraph will be the built-in one and Combinatorica`RandomGraph will be the one defined in Combinatorica.
What happened in your case that you used Combinantorica's RandomGraph which returns a graph object in a different format than what the new, built-on NeighborhoodGraph expects. It can be of course converted, but it's probably not worth the trouble since there's the built-in RandomGraph now.
The GraphUtilities` package is for working with edge-list representations that GraphPlot expects, and for converting these to the Combinatorica format. There should be no need for this package at all in version 9. (Combinatorica contains a few functions not yet available as built-ins but GraphUtilities doesn't.)
RandomGraph[{m,n}]) – Szabolcs Mar 16 '13 at 19:17RandomGraph(which is different fromCombinatorica`RandomGraph). Tryg = RandomGraph[{10, 20}], thenNeighborhoodGraph[g, 1]. – Szabolcs Mar 16 '13 at 19:34