On the Apple keyboard, pressing the fn + Backup keys works as a delete key - not so with this keyboard. Do they not know, or are they being disingenuous? Either way, it's a design flaw, and they should own up. Overall, I like the folio and keyboard, but Kensington usually doesn't miss the small stuff like shut-off for the New IPad and a delete key combo like, ahem, Apple.
I contacted Kensington about this problem (I have the same issue). Bottom line, Apple views themselves as gods and do not think you need a delete key. So they won't allow anyone else to give you one, either. Here was Kensington's response:
"Thank you for contacting Kensington Technical Support.
The Kensington KeyFolio is equipped with a standard Apple keyboard layout. Be advised, the on screen keyboard displayed on your iPad is not equipped with a standard 'delete key'. If you observe, the on screen keyboard has only a standard 'backspace key', hence the iPad does not recognize the delete function.
For Example, the key "F1" is Help, once the keyboard is paired, up and running, if your press "F1" , the function will not respond as Apple has not assigned any function pertaining to "F1" on iPad, hence there are no function keys on your on-screen iPad keyboard, similar with print screen key. In a way, only the common keys on your on-screen iPad keyboard and the Kensington Keyfoilo keyboard would work. However, if you pair the unit with a MAC or a Windows based computers all the keys on the keyboard including the function keys would respond, because function keys on a computer is a pre assigned function.
Moreover, even if you do purchase a different keyboard for your iPad, still the function keys,shortcut keys would not respond, the reason above explained."
I noticed the same problem. Something wrong with the answer from Kensington. My wife bought a very similar case from Brookstone in April 2012. The keyboard looks and feels the same except it doesn't say Kensington on it. I checked her key board and tne delete key works. So - better programers at Brookstone? or did Apple let one slip by?