To delete a state, click the name of the state, and choose Delete from the Undo History palette menu. States following the one you selected are also deleted.
To delete the list of states from the Undo History palette, without changing the image, choose Clear Undo History from the palette menu or choose Edit > Clear > Undo History. Clearing is useful for freeing up memory, especially if you get an alert that Photoshop Elements is low on memory.