Having seen some of the forum politics on some larger forums, I think it is advantageous to leave the posts visible so all can see what happened and why. I think that when someone gets banned, it increases confidence in the administrators and moderators if everyone can see that the banned poster made a complete moron out of himself before getting the boot.
We've been fortunate to attract very few trolls, and the threads they start and/or ruin can just drift into oblivion through passage of time. Otherwise, I like the suggestion of a "troll hole", "cave", etc. for the threads started by the troublemakers. Again, leave it open for all to see.
Of course, if something raises issues of defamation, copyright violation, obscentiy, etc., then deleting the material is appropriate.