Should you want to delete all Magento products completely, deleting them from the admin area isn't enough unfortunately, because upon deletion, the product ID-s remain still. You should use SQL to delete all products from your Magento shop with product ID-s.

Here's the query (tried and tested on Magento 1.6.1.0):

TRUNCATE TABLE `catalog_product_bundle_option`;
TRUNCATE TABLE `catalog_product_bundle_option_value`;
TRUNCATE TABLE `catalog_product_bundle_selection`;
TRUNCATE TABLE `catalog_product_entity_datetime`;
TRUNCATE TABLE `catalog_product_entity_decimal`;
TRUNCATE TABLE `catalog_product_entity_gallery`;
TRUNCATE TABLE `catalog_product_entity_int`;
TRUNCATE TABLE `catalog_product_entity_media_gallery`;
TRUNCATE TABLE `catalog_product_entity_media_gallery_value`;
TRUNCATE TABLE `catalog_product_entity_text`;
TRUNCATE TABLE `catalog_product_entity_tier_price`;
TRUNCATE TABLE `catalog_product_entity_varchar`;
TRUNCATE TABLE `catalog_product_link`;
TRUNCATE TABLE `catalog_product_link_attribute`;
TRUNCATE TABLE `catalog_product_link_attribute_decimal`;
TRUNCATE TABLE `catalog_product_link_attribute_int`;
TRUNCATE TABLE `catalog_product_link_attribute_varchar`;
TRUNCATE TABLE `catalog_product_link_type`;
TRUNCATE TABLE `catalog_product_option`;
TRUNCATE TABLE `catalog_product_option_price`;
TRUNCATE TABLE `catalog_product_option_title`;
TRUNCATE TABLE `catalog_product_option_type_price`;
TRUNCATE TABLE `catalog_product_option_type_title`;
TRUNCATE TABLE `catalog_product_option_type_value`;
TRUNCATE TABLE `catalog_product_super_attribute`;
TRUNCATE TABLE `catalog_product_super_attribute_label`;
TRUNCATE TABLE `catalog_product_super_attribute_pricing`;
TRUNCATE TABLE `catalog_product_super_link`;
TRUNCATE TABLE `catalog_product_enabled_index`;
TRUNCATE TABLE `catalog_product_website`;
TRUNCATE TABLE `catalog_product_entity`;

TRUNCATE TABLE `cataloginventory_stock`;
TRUNCATE TABLE `cataloginventory_stock_item`;
TRUNCATE TABLE `cataloginventory_stock_status`;

INSERT INTO `catalog_product_link_type`(`link_type_id`,`code`) VALUES (1,'relation'),(2,'bundle'),(3,'super'),(4,'up_sell'),(5,'cross_sell');
INSERT INTO `catalog_product_link_attribute`(`product_link_attribute_id`,`link_type_id`,`product_link_attribute_code`,`data_type`) VALUES (1,2,'qty','decimal'),(2,1,'position','int'),(3,4,'position','int'),(4,5,'position','int'),(6,1,'qty','decimal'),(7,3,'position','int'),(8,3,'qty','decimal');
INSERT INTO `cataloginventory_stock`(`stock_id`,`stock_name`) VALUES (1,'Default');