Install Boot Camp gone bad -- installed windows on a wrong drive
As already stated by Mike, when you use Disk Utility from the install DVD, the "erase" and "delete" partition options should not going to be grayed out. 

Look at the following image. Notice the important information, you have to select your DRIVE and not the partition. Then you have to select "Partition" in the tabs and finally click the little "minus" sign (which is Grayed out in the image).



Now when you boot with your Install DVD, you can open Disk Utility from the Menu during the initial stage of the install, when you're still being "welcomed" to OS X's install. 

Try it from there and DiskUtility will launch (it will take a few seconds, since the DVD drive is not as fast as a Hard Drive) and try to remove the partition from there. Remember to "Apply" the changes.