Moved from http://blogs.msdn.com/vijgang

Sample script to delete all items from a List in SharePoint 2007

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[System.Reflection.Assembly]::Load("Microsoft.SharePoint, Version=12.0.0.0, Culture=neutral, PublicKeyToken=71e9bce111e9429c")
[System.Reflection.Assembly]::Load("Microsoft.SharePoint.Portal, Version=12.0.0.0, Culture=neutral, PublicKeyToken=71e9bce111e9429c")
[System.Reflection.Assembly]::Load("Microsoft.SharePoint.Publishing, Version=12.0.0.0, Culture=neutral, PublicKeyToken=71e9bce111e9429c")
[System.Reflection.Assembly]::Load("System.Web, Version=2.0.0.0, Culture=neutral, PublicKeyToken=b03f5f7f11d50a3a")

# "Enter the site URL here"
$SITEURL = "http://serverurl"

$site = new-object Microsoft.SharePoint.SPSite ( $SITEURL )
$web = $site.OpenWeb()
"Web is : " + $web.Title

# Enter name of the List below
$oList = $web.Lists["ENTER LIST NAME HERE"];

"List is :" + $oList.Title + " with item count " + $oList.ItemCount

$collListItems = $oList.Items;
$count = $collListItems.Count - 1

for($intIndex = $count; $intIndex -gt -1; $intIndex--)
{
        "Deleting : " + $intIndex
        $collListItems.Delete($intIndex);
}

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Disclaimer: The above code is provided "As Is". This is just a sample code and is not production ready.