I needed recently to basically remove my app installation from the Windows Phone 7 emulator. I could not find how you can remove the app from the emulator, but I found a way to reset and force the Windows Phone 7 emulator to cold boot.
You can clear the windows phone emulator state, by deleting the saved state file in:
%ProgramData%\Microsoft\XDE\*.dess
You can just hit the windows key on your keyboard and paste this "%ProgramData%\Microsoft\XDE\" and you will be taken to the right location.
Delete the *.dess files. This will force the emulator to reset and run the cold boot sequence.
Too bad, it's not possible to do simulator reset right from the development tools. Here's hoping that Windows Phone Tools development team will improve that situation in the future releases.
Please share your thought in comments.