You can't simply trash the System Folder that is used for OS 9, as a booted OS X won't let you -- it says it's in use. I rebooted in single user mode (hold Command-S at startup), mounted the drive writable and removed it that way. Once at the singleuser prompt, do
$ mount -uw /
$ cd /
$ rm -rf 'System Folder'
Be very careful with your spaces and escapes, or it's bye-bye to the /System folder (the actual OS X folder!), which would be very bad.
That's the system taken care of.
Now you can reboot and remove /Applications (Mac OS 9) from your disk -- the Finder lets you do this just fine. Now to fix things up so that the Preferences pane doesn't appear, and the system doesn't think there's an OS 9 bootable part of the disk. In the Terminal, do:
$ sudo bless -folder /System/Library/CoreServices
Thiss will re-bless the OS X folder, and remove any blessing from the now-removed OS 9 folder. You will also need to find the com.apple.Classic.some_number.plist file in ~/Library/Preferences/ByHost/, and remove it:
$ rm ~/Library/Preferences/ByHost/com.apple.Classic.some_number.plist
If there is a file at ~/Library/Preferences/ called com.apple.Classic.plist, remove that, too. Additionally, there may be a folder at ~/Library/Classic containing a file called .LoadClassicPref. That should be deleted, too, after checking that there's nothing in the folder you want to keep:
$ rm -rf ~/Library/Classic
You may wish to repeat the above preference removals for all users.
That's it. No removing OS X components or otherwise messing with /Library or /System, and the Classic Preferences pane will know not to appear. All you are doing is removing the preference files left over from when you had OS 9 installed, so that the Classic prefpane re-looks at the system, and doesn't bother loading.

