Hi George,
You cannot delete work items in this version of TFS. You can however customise your work items so that they have a "deleted" state so you can effectively set your WI's not to appear in your required reports.
Check out these series of posts on the subject: http://forums.microsoft.com/MSDN/Search/Search.aspx?words=delete+work+items&localechoice=9&SiteID=1&searchscope=allforums
Joe Sango |