The manner in which custom Targets for Policies are created changed in Altiris version 8.1.
Custom Targets are now stored in a folder that is not accessible through any menu in the console; however, they will automatically be deleted on a weekly schedule when they are no longer being used. There should be no need to manually delete these targets, and targets that are in use should not be deleted at all.
If a target must be manually deleted you can do so by:
NOTE: You will not be given the opportunity to delete targets that were created by another user.