Ok, that did work, I'm back in action. Also for other that might see this - the process does NOT delete the shares, they are under a different directory. The other 'advantage' of this is that it did clean up a lot of old files because I have win 7 now, but before had vista and xp backups on WHS.
Anyway this is what I did:
You may want to delete the entire backup database from your home server to reclaim the disk space. The backup database is stored entirely in the folder D:\folders\{00008086-058D-4C89-AB57-A7F909A47AB4}.
To delete the backup database on your Windows Home Server
1. Run mstsc.exe to start a Remote Desktop Connection session to your home server.
2. Open a Command Prompt, Click Start, Run and type CMD
3. Type net stop PDL.
4. Type net stop WHSBackup to stop the Windows Home Server Backup service.
5. Delete the contents of D:\folders\{00008086-058D-4C89-AB57-A7F909A47AB4}. Do not delete the folder.
6. Type net start WHSBackup to restart the Windows Home Server Backup service.
7. Type net start PDL.
Important
After deleting the backup database, you need to reinstall the Windows Home Server Connector software or run the Discovery.Exe program on each of your home computers to re-establish a relationship between your home computers and your home server so new backups will occur.