To delete a theme, first go to the Settings » Themes page. There, disable the theme you wish to delete. This is important. It ensures that none of them are already associated with the theme you're trying to disable. If there ARE accounts assigned to the theme, it will notify you and provide options to associate those client accounts to another theme individually or in bulk.
Once the theme has been disabled, you can delete the folder on your server. It's located in your [form tools root]/themes folder. Note: NEVER delete the default folder.
After deleting the folder, next time you click the "REFRESH THEME LIST" button, the theme will be removed from the page.