Pop open the createaccount.aspx.cs file. There are 3 places where it is explicitly inserted into the list of available states. You can either remove it from the file directly, or make sure that you have at least one state available that has no country id (eg. at least one state in the dbo.States table has a null value for the CountryID column). If there is at least one state with a null CountryID value, the page will use that instead of auto-inserting Other (Non U.S.). We do this so there is a default "no country" value if the admin user has not defined one.
<a href="http://www.aspdotnetstorefront.com">Shopping Cart Software</a>