How to target and remove a given fieldset
There's a wee bit of confusion in your PHP code there; you're calling a function with the same name as the string passed in $form_id, and passing 'edit-body-und-0-format' as a parameter.

What you need to do is change the relevant field in the $form array, e.g.

function THEMENAME_form_alter(&amp;$form, $form_state, $form_id)  {
  $form['edit-body-und-0-format']['#access'] = FALSE;
}


Using #access is preferred to unset(); there might be something in a validation/submit handler that's relying on the existence of those fields, whether or not values have been submitted this time round, and removing it completely might break those (or cause some unpleasant warnings).

If you haven't already installed it, the Devel module is a must for development; you can use the dpm() function to inspect PHP elements on the front end. If you add dpm($form); to your current function, for example, when you visit the page you'll see a nice structured output of the $form variable making it easy to find the element(s) you want to alter.

Update...

If you're trying to hide the text format options there's a slightly different approach. You need to attach an after build function to the textarea, and remove the format options in there. For example:

function THEMENAME_form_alter(&amp;$form, $form_state, $form_id)  {
  if ($form_id == 'some_form') {
    $form['body']['#after_build'][] = 'MYTHEME_body_after_build';
  }
}

function MYTHEME_body_after_build($element) {
  $element[LANGUAGE_NONE][0]['format']['#access'] = FALSE;
  return $element;
}


or something very similar.