Click on Google logo on the toolbar and from the drop down menu Select the "Clear Search History" option.
If you want to completely disable your Toolbar's search history:-
Click the "Options" button on your Toolbar and un-check the box next to "Drop-down search history."
If it's version 4:-
During searching an item when your drop-down search history appears, simply click the "Clear History" link.
If you want to tweak through the registry:-
Now navigate to the following location:-
Select the History subkey and delete it.Close the registry editor and restart the system.