Don't know of one. I just saw that in Firefox you can use shift+delete when you highlight the auto-complete suggestion to delete that one. I propose that MediaMonkey implements the same.

Is there a way to remove individual items or clear the entire "Search" entry field drop down list?

I can do it by editing/deleting the [SimpleSearch] section of the MediaMonkey.ini file, but is it possible to do using the MM interface?

The average user shouldn't have to edit the .ini file, nor the system registry.