The first test I did removed all the dvrms files I had, so I have only done one test so far.
If you set the max TV limit under Settings > TV > Recorder Storage, it will delete dvrms files once you have reached that max.
I will do a quick recording with the delete after watching setting turned on and report how that goes.
**Update - I never did get a show to delete after watching. First time I have messed with the setting, so I am not sure if I am doing right or not.
The only setting left would be delete files after so many episodes or once they are so many weeks (months) old. These will require at least two weeks to see the results, so I doubt I will remember to either check for results or post an update here