What is the correct way of cleaning up old Vista backups?

I have what I would think would be a fairly standard setup:

I have Windows Vista machine with an external hard drive that is
intended exclusively for backup purposes.
I have set up daily backup of files.
This has worked well for a couple of months.
My C: hard drive on the Vista machine has about 200GB of data
currently. The H: backup drive is 1TB.

Now, the backup drive is full. The daily backups fail with the
following message

[Window Title]
Backup Status and Configuration
[Main Instruction]
The backup did not complete successfully.
An error occurred. The following information might help you resolve
the error:
There is not enough space to save the backup files. Free up disk space
or change your backup settings. (0x81000005)
Backup time: 2008-12-27 19:13
Backup location: Backup WD (H:)
[Try again] [Adjust settings] [Close]

To my surprise, it seems that Vista backup does not automatically
erase the oldest backups when it runs out of space.
What is the best way of erasing old backups to create space?

I am aware that the daily backups are under a directory named
H:\ComputerName\Backup Set 2008-08-24 204607\
with folders named "Backup Files 2008-mm-dd xxxxx".
I could certainly manually erase the oldest of those folders. But, I
notice that the oldest of those folders is also the biggest. Which
makes me suspect that the backups are incremental, and, if I erase the
oldest then I will no longer have a complete backup, e.g. some files
that did not change since the first backup, would then lack backup.
So, again, what is the appropriate way to erase old backups, ideally
informing the backup system of the necessity to create new backups of
files no longer backed up?

I have looked at deleting using the advice here
but that does not seem to erase any of the daily backups.

"Wbadmin delete systemstatebackup" documented here
http://technet.microsoft.com/en-us/library/cc742081.aspx sounded
promising, but is not supported on Vista.