Currently (May 2011) The Times app holds 8 copies of the times and then deletes them sequentially. You can't delete individual issues (at least not in this version of the app) but you can clear the entire cache if you want to. Here's how:
- Open 'Settings' on your iPad
- Choose 'The Times' from the list of apps
- Slide the 'Clear cache' button to 'on'
- Quit 'Settings' and reopen the Times iPad app
Hope this helps.