Usually returning removes from the library; but could get mixed up if you had already returned from another device or ...
On 2.0, right click on the book in the library and choose 'remove from library' should do the trick.
On 1.7.2, click on the dropdown to top left of item and choose 'remove from library'.
Also if you are worried about space check your Digital Editions directory.
Returning a book often leaves the (now unreadable) .epub file around, and the .annot (in the Annotations subdirectory).
You will also have the .acsm in the downloads directory.
Thanks so much, worked perfectly. I do delete the ascm, but wasn't sure anout the annotations.