How do I delete downloads from nexus 7

I assume you are in the downloads app if so just touch and hold for short while it should then select the file and the delete button should (trash can) appear at the top of the screen.

By default, the tablet will save your downloaded files of any kind to directory '/sdcard0/Downloads'. In order to delete a downloaded file, simply install a file manager (e.g. Astro File Manager, ES File Manager,...), locate to the directory I've mentioned above and delete the file you want.