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Windows 7 Favorite feature is very productive if you visit same folders more often and it displays all your favorite folder on top left navigation in the explorer. If you want to delete any item inside it you can just do a right-click and select remove but if you want to delete multiple items from it, you cannot do it from the explorer itself.
All Windows 7 favorite are stored in a folder C:\Users\<username>\Links. If you open this you would see all the items are mere shortcuts. Now you can select any number of items and just delete in one click from here which will clean up your Windows 7 Favorite list.