I also use Firefox, and you run into the same problem. To delete items from Firefox, view the history (Ctrl-H) then right click on the item and select delete.

On the subject, it’d be nice to just hit ‘delete’ from the address bar when you’re arrowing up and down. n-e-w -> down -> delete -> enter.

I use Firefox, and it uses a ‘form completion’, such that it’ll only guess urls you’ve typed in there before. While this is nice, I don’t know of a way to remove individual entries.