Why would you do this? It's a very drastic move.  So before doing this, please consider if you have other options.  A few reasons why :

1. There's no UI available, so you have to do this through the command-line tool using "TfsDeleteProject".
2. It only deletes
   • The references to the project
   • The SharePoint portal site
   • Reporting Services site
3. It will not delete
   • The data warehouse info.  And don't try to delete the info in SQL directly.  As the data schema and the relationships are very complex, so in most of the times, you will corrupt your database.

As we know all this above we have also one important conclusion :

Now we know all this above and let's say we have considered some other options.  Still the result is OK, we want to delete our team project.  Here's how you do this :

1. Be sure that you don't have any assets open
2. Goto to C:\Program Files\Microsoft Visual Studio 9.0\Common7\IDE\
3. Here you will find the command "tfsDeleteProject.exe"
4. Usage: TfsDeleteProject [/q] [/force] </server:<server name>> <team project name>
   /q : Silent installation.  No prompt
   /force : If data can't be delete, still continue
   /server<server name> : your TFS server
   <Team project name> : Name of the Team Project to delete.  If there are spaces in the name use quotes.
5. Run the command.  You will be prompted if you are sure that you want to do this irrecoverable operation.  Just answer Yes.
    
6. At the end you're project is deleted.

One remark : You can recover a deleted team project, but you have to restore a backup of the database.