Huh. Wonder how this question got overlooked...
In the Contacts app, go to your group. At the bottom of the contact info (with the iPad in landscape), there's an "Edit" button. Press it and then scroll all the way to the bottom. You should see a red bar titled "Delete Contact." Press that and boom! The contact is gone.
Hope this helps.
Marilyn
P.S. I'm moving this post over to the Help forum, as that may have been why no one saw it - it was lost! Sorry. But, hopefully others will see it ... and correct me if I've messed up the answer.