I see no way to delete chip names in the bottom menu. Also, a good addition would be a grid or a key to restrict traces to 90 degree paths. Minor additions to an excelent program!
Viewing post in Digital Logic Sim (old version) comments
I found a way to delete chips, and its pretty simple:
You drag the chip you want to delete into a blank workspace with no inputs, outputs, or anything else. Then, you create a chip with the same name as the one you are trying to delete. Because it's trying to replace the old chip, but the old chip is used inside of it, it will just get rid of the chip completely.