Sinve I've started listening to a lot of Podcasts on my iPod, I've wanted the iPod to have a Trash Can even more. I usually just listen to each podcast once, but I rarely remember to manually delete the ones I've already listened to. When I first wrote about this idea, I proposed that the ratings interface also be used to delete, but that has some problems. Unfortunately I can't think of a really good way to delete music from the iPod without adding another Now Playing slide-across screen. Maybe, with the next iPod revision we'll see some more advanced functionality.
Delete on the iPod should work just like on your OS: deleted files first go to the trash. From the Trash, files can be restored or permanently deleted. For people who use the auto-sync, the Trash would be automatically emptied on sync and any trashed files would be prevented from being automatically transfered to the iPod again. As for the interface for deleting a file, I would hope that if the next iPod revision does include a touch screen that we'll see some more advanced functionality while a song is playing: such as deleting music, adding a song to a specific playlist, and better playlist management all around.