Okay, I delteted the app from my iPhone, but iTunes wants to reinstall it. No obvious way to delete the app from iTunes. Of course, when I find out how, it will be facepalm time.
When you want to delete and app from Itunes to get it out of your library you need to click on the 'apps' in your itunes library, not the 'app' on your device. So look on the left column of itunes, Under the heading LIBRARY you'll see APPS, in that window if you right click on a MAC or PC you can delete the app from your library forever.